Transfer and Re-registration Market Update – First Quarter 2018RSS icon

Written by Howard Finnegan on Tuesday 24 April 2018

The end of 2017 saw continued growth in the number of counterparties supporting the open electronic transfer standards (TeX/UKETRG), and a dramatic increase in the volume of ISA and GIA transfers.  This trend tailed off a little during the first quarter of 2018, which suggests that the disturbance resulting from recent re-platforming activity is continuing to impact transfer volumes. 

Market Coverage

The number of organisations supporting the TeX legal framework and open standards transfers has broken the 200-barrier, with almost universal coverage in the adviser platforms, D2C and Execution Only Platforms. There has been a significant increase in the number of Wealth Managers/Private Clients participants during the first quarter of the year, mainly driven by outsourcers going live with multiple clients.

The following is a summary of the coverage in the main market segments:

  • 20 Adviser Platforms, representing 94% of AUA, support electronic transfers
    • 19 of the top 20 Adviser Platforms support electronic transfers
    • 12 Adviser Platforms support the latest version (v3.0) of the transfer standards, representing 63% of AUA
    • 11 Adviser Platforms use the Altus Transfer Gateway (ATG) or 55% of AUA
  •  24 D2C Platforms and Execution Only Brokers support electronic transfers
    • 9 of the top 10 D2C providers support electronic Transfers
    • 19 support V3.0 of the transfer standards, 20 use ATG
  • 54 Wealth Managers and Private Banks support open electronic transfers
    • 48 support v3.0 of the transfer standards the same 48 are using ATG.
  • 5 Custodians/Intermediate Unit Holders support electronic re-registration
    • 4 use ATG
  • 93 Fund Managers represent 88% of FUM of UK retail funds now support electronic re-registration.
    • Almost all readily available UK retail funds can be re-registered electronically.

Transfer Volumes

The volumes of ISA and GIA transfers in the first quarter of 2018 were almost double the volumes of the same period in 2017 (94% increase).  However, they were 15% below the volumes during the last quarter of 2017.  As discussed in my previous blog, the dramatic increase in transfer volumes has been driven by a series of platform Migration (re-platforming). These changes had less impact in the first quarter of 2018, which explains the reduction in volumes.

What can we expect for the rest of the year ?

There are a number of significant platform migrations still planned in the coming months. We anticipate that the disruption these projects will cause, alongside a continued increase in the number of market participants, will drive an increase in transfer volumes. 

The Transfers and Re-registration Group (TRIG) are due to publish some further details on a number of their recommendations, and we hope they will address the thorny issue of interoperability: we have three electronic transfer solutions across the UK’s savings and investment industry that do not interoperate.  For more information on this fragmented transfer landscape have a look at my article.

For more information, including details of participating counter parties, please contact me.

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