Altus

From the advisor and consumer point of view the migration of existing investments onto platforms is absolutely key to achieving the promised value of a platform. The consolidated view and management of a client’s portfolio (and the inherent benefit that is derived) that is a cornerstone of the “wrap” proposition is not possible if the existing assets in that portfolio remain in-situ, potentially fragmented across multiple providers.

Anyone in the investment market would acknowledge that levels of new business in the current market conditions are likely to remain low in the near future, making the commercial appeal of migrating existing assets onto their platform greater than ever.

Recent research from one investment consultancy estimated that over £200bn of assets would be migrated on to platforms over the next 5 years. Similar earlier predictions have proved to be optimistic, but there is no doubt that the platform providers who have invested so heavily over the last few years are expecting to attract very high levels of existing client assets.

Supporting this aspirational level of migration in the current environment of signed paper forms, lengthy processing times and variable support for asset re-registration is difficult and probably uneconomic. It is no surprise then that there has been much debate around the transfer of client assets which has resulted in some important steps towards improving the process.

Firstly, changes in government legislation, FSA rules and IMA industry guidance have paved the way for asset re-registration to be handled via electronic communication rather than requiring a client signature. Secondly, TISA has endorsed a set of electronic messaging standards for re-registration comprising SWIFT, ISO 20022 and the market practice developed by the UK Funds Market Practice Group.

However, legislative changes and technical standards are only part of the answer and platform providers need to address a host of other practical challenges before adopting new practices:

• Handling the migration of a potentially complex mix of assets for a client as a single, painless transaction
• Tracking the progress of the migration of the whole portfolio in order to provide visibility to clients and advisors
• Providing a common model of the migration process to transparently handle the varying processes and capabilities of the underlying asset managers

Ultimately, the goals of these ongoing changes must be:

• To provide the consumer with a fair and efficient way to transfer their assets
• To resolve the burden of complexity faced by the advisor
• To give providers a financially viable and, where possible, automated means to transfer assets on to and off of their platforms

Altus has been working with product providers to address these broader issues and we are now offering a simple and efficient packaged solution for handling the asset migration process.  See our product range for further information.