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Nick Bamford: Re-platforming problems exposing the dinosaurs

Re-platforming problems“The cheque is in the post.”

“Of course I love you.”

“Hi, I’m from compliance and I’m here to help you.”

These are some of the greatest lies in the world and now a new one has been added to the list: “We are re-platforming to provide you with a better service.”

When the first platform providers came to market, it seemed to us they were using advisers to test whether their offerings actually worked.

We were used to dealing with variable service from conventional product providers.

Alistair Cunningham: Platform switching must be made simpler

But we could see platforms were likely to be the way forward. We could present our clients with a consistent experience of buying, managing and selling funds online, and the automation could remove the variability of service we faced. Conventional providers started to look like they might go the way of the dinosaur.

There followed a bit of a honeymoon period. We received a better service and began to see how we might align our service delivery to clients to that the platform provider gave to us.

We encouraged our clients to create their pins and passwords in order to see what was happening with their money. To some extent, advisers also started to take on a role similar to manufacturers, in that we could apply our investment proposition by selecting the funds we wanted from the whole of the market on the platform.

We could regularly rebalance portfolios and manage the investment of new money and the withdrawal of benefits quickly and effectively. Things seemed to have changed for the better.

Nick Bamford: Are you noticing vulnerability?

However, the technology that worked so well just a decade earlier started to get clunky, and platforms decided they needed to upgrade.

If you want to strike fear into the heart of an adviser, simply tell them their platform of choice is going to be upgraded. It is almost a given that things are going to go wrong.

I do wonder whether platforms do much in the way of research about their customer needs ahead of making these changes. Do they talk to advisers about the experience they want? Do they consider for one moment what the experience will be like for the client whose money it is?

Recent experience has shown us how re-platforming can mean a real deterioration in the service provided. I cannot remember a time when my admin and technical teams have been given such a runaround by providers. What was simple before has become unwieldy and almost unworkable.

Some clients have had their Isa and GIA investments moved to an updated platform with their pension plans remaining on the old system. Being able to easily identify what those clients have paid in charges is a thing of the past.

All in all, I do not think there is one re-platforming experience where I could say that we and the client are better off as a result. Platform providers are beginning to look more and more like the insurance companies of the past – unwieldy and slow. How sad is that?

Nick Bamford is executive director at Informed Choice

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Comments

There are 15 comments at the moment, we would love to hear your opinion too.

  1. Nick. Totally agree. Not just re-platforming though that is an issue. Re-registration of assets is another massive headache. Can take up to six months on average although longest to date is 10 months.

    Expectations are much greater than this. We can switch utilities and bank accounts in less than 2 weeks. Time the big companies woke up to client expectations and regulatory requirements.

    • I agree Kevin it takes far too long for re-registration to take place. In this day and age surely 2 weeks should be the norm? I stand to be corrected if there is something other than poor administration behind this

  2. Nicholas Pleasure 17th September 2018 at 2:05 pm

    Sadly Nick, a lot of the once exciting platforms have been bought up by the unwieldy and slow insurance companies of the past. Look at Aegon for the best example of this (although service at Cofunds was pretty shocking beforehand, I don’t think any of us realised just how bad it could get).

    Anyone who goes to a big old-fashioned insurance company for a platform needs to be thoroughly ashamed of themselves.

    Insurance companies and hopeless admin go together.

    • Hi Nicholas, and it isn’t just the platforms that are owned by “big old-fashioned insurers that are problematic some of the “independent” ones are poor as well

  3. Agreed. For example FundsNetwork’s new “enhanced” site is surely thus named for a bet?

  4. Christopher Petrie 17th September 2018 at 3:49 pm

    I’m using Transact these days. Not a traditional life office in sight.

    My clients like the good service they get.

  5. Quite agree! The really sad part is that all the companies accept that there will be “inevitable teething problems” – in quotes as these are comments I have heard. In other words once we re-platform expect things to get worse.

    Imagine if airlines had the same expectations when they upgraded to new aircraft

    Most of the present platforms will have gone the same way as most traditional insurers in 10 years- and for the same reasons: they believe that mediocre is good…

  6. You find a green field and you build a road. Easy.

    The road starts to fall apart and you keep patching it up and adding new things that the law newly requires, like cat’s eyes.

    Eventually there is no choice but to tear it all up and start again, only there are lots of legacy problems now. The service station is too near the road to allow any widening. The s-bend that need straightening out has houses beside it.

    The first build is easy. The replacement is almost impossible to do. Just because it’s all that “techy stuff” doesn’t make it any easier.

    Bank and legacy insurance business upgrades are riddled with muck ups and as that all singing and dancing new funky thing of a decade ago – platforms – have been coming up for upgrade, so they have been muck ups too. When all the new so-called “disruptor” app-based investment houses get to ten years old and need upgrading, they will be horrow shows too. What does not look like a “dinosaur” today, will suffer the same indignity in time.

    • Bryan, great analogy. Perhaps I should not be surprised at all really. I wonder if it might be cheaper/better if the platform providers dumped what they have and started again (built a new road) each time?

  7. One of the platforms stands head and shoulders above the others, but some advisers still put clients on lesser platforms. It strikes me as odd as I can’t see any reason to use the others.

  8. It’s very frustrating Nick – we’re seeing service standards drop even where there isn’t re-platforming going on.

    The interesting is that there’s more due diligence and focus on cost than ever before and yet providers are able to throw everything up in the air without any adviser/client consent (often resulting in a downgraded experience).

    There’s still (large) platforms which aren’t Mifid 2 compliant.

  9. The Senior Managers Regime could easily enable the same system as in the US where assets move in 7 days or the CEO of the Platform is fined. Until someone and or firm are penalised for being tardy nothing will improve.
    We need an single process not 20 different ones, eg AML should be not be needed when assets are moving inspect.

  10. And today we cannot get on-line valuations from one re-platformed provider because they have managed to merge two different clients accounts (albeit under one SSAS)together so that acquisition costs are totaled and make it look like a huge loss has taken place.

    They can’t even tell us when this will be corrected.

    You really could not make this stuff up!

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