Speaking at a recent Skandia platform showcase in Johannesburg, UK chief executive officer Nick Poyntz-Wright said some firms have “tried and fai-led”, pointing to the “tens of millions” spent by Friends Provident and Aviva on development costs.
Poyntz-Wright said the fact that Standard Life and Axa “rent” technology from the same third-party IT provider, FNZ, could create “contention”. He said: “For them to move or consolidate their own backbook on to this more modern platform would require cannibalisation. It would probably require them to move to a lower-margin model, which is obviously unpalatable for them.”
But Standard and Axa deny that contentious issues arise from their shared technology provider.
Poyntz-Wright also criticised Cofunds for “renting” its product wrappers from L&G and Fidelity doing the same with Standard Life, claiming it makes the proposition “not so clean and straightforward as they are reliant on others to provide it”.
He said players such as Nucleus, Transact and Novia are “structurally poised to need an exit”. He said: “You would want to be confident that it is going to be around for 20 to 25 years.”
But Nucleus chief executive officer David Ferguson says: “It is particularly bizarre coming from a company whose ownership changed just over three years ago.”
Novia says ownership risks are the same for big and small players and Transact head of marketing Malcolm Murray says the platform has been around for nine years and is “certainly not in it for the short term”.
A Fidelity FundsNetwork spokeswoman says Standard administers the platform’s Sipp, onshore and offshore bond only and the proposition and products are its own.
Cofunds marketing and proposition director Alastair Conway says: “We don’t rent anything. We have relationships with four different providers as well as providing some wrappers ourselves. We will leave IFAs to work out what is right rather than having lectures from Skandia.”