Old Mutual cancels replatforming contract with IFDS

OMW says new agreement with FNZ “considerably de-risks” its replatforming programme

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Old Mutual Wealth has terminated its contract with IFDS for its replatforming project and is now partnering with FNZ instead.

In a statement, OMW says the move “considerably de-risks” its platform transformation programme.

At the end of April, the replatforming project had cost OMW £330m, of which £110m related to “heritage business”.

OMW had previously estimated the cost of the replatforming project with IFDS could reach £450m.

It says cost estimates for the rest of the  project with FNZ are between £120m and £160m.

The statement says: “The new platform is expected to provide additional functionality that was not included in the previous arrangements. Management estimates this would have cost in excess of a further £50m and taken a further two years post migration to deliver.”

OMW expects the FNZ-backed platform to be operational for new business by late 2018 or early 2019 with migration to follow after that.

OMW chief executive Paul Feeney says: “Given the cost, effort and time already invested in the programme, we have not taken these decisions lightly. This has been a difficult journey for all stakeholders. We have made tough decisions today but we believe they are the right decisions for our customers, their advisers, our business and our shareholders.”

The decision will not affect Old Mutual’s plans to hive off parts of its group of business from each other in a “managed separation”.