FCA in talks with providers over replatforming concerns

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The FCA has held meetings with a number of platforms over fears replatforming projects could cause customer detriment, Fund Strategy understands.

It is understood the regulator has met with platforms to find out more information around the impact of replatforming on costs, data security as well as testing processes, especially in cases when platforms change technology provider.

A source with knowledge of the meetings, who asked to remain anonymous, says the FCA is principally treating the exercise as a “fact-finding mission” at this stage.

They said: “The FCA is looking at this because of the potential to have client detriment on pricing and service and try to get more understanding on what the implications of replatforming are. It is more a fact-finding mission, an educational process rather than for the FCA to take any action.

“There is a large amount of assets to move from a platform to another so you will understand why the regulator should be looking into that.”

There are currently six platforms undergoing replatforming: Ascentric, Alliance Trust Savings, Aviva, FundsNetwork, Old Mutual Wealth and Cofunds.

It is understood FundsNetwork has been in regular discussions with the regulator on its current replatforming project, among other issues.

Nucleus also met with the FCA to discuss its past replatforming work, which took place two years ago, and how that impacted the business and its clients, it is understood.

The total cost of replatforming for the six providers is expected to be more than £828m with almost £200bn of assets in total to transfer as a result of their change in technology, according to a Finalitiq report.

Old Mutual Wealth is estimated to spend the highest amount at £450m for its migration to its new operating system IFDS Bluedoor. Some £34.5bn clients’ assets will transit to the new technology.

An Old Mutual Wealth spokesman says: “The programme to transform our UK platform is a significant piece of work. As with any significant strategic development, we discuss this with the FCA as part of our normal supervisory relationship to ensure we deliver high levels of client service during the process and the best platform possible.”

The FCA declined to comment.