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.
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.
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.