Written by Howard Finnegan on Friday 2 May 2014
During the first quarter of 2014 the transfers and re-registration market could be best described as making steady progress. With over 80% coverage of adviser platforms and providers, based on AUA, and over 90% of fund managers, based on FUM. We’ve seen the volumes of electronic transfers and re-registrations increase by 20% over the quarter. However, more significantly, the number of electronic transfers and re-registrations being completed within the TeX SLAs has dramatically improved with 99% of asset re-registrations completing within two days.
The other important development during the quarter was TeX members voting to include pension transfers in the TeX legal framework. This paves the way for an automated open and interoperable cross industry pension transfer solution covering the full range of pension types (SIPP/SSAS, GPP/PP, DC, Master Trust, Section 32/A) and a wide range of assets (cash, funds, equities and many others).
We are still seeing fairly high rejection rates, particularly at the information request phase of the transfer process, this delays the start of the transfer process and increases the costs as it usually requires manual intervention. Altus are working on a number of initiatives including additional automated validation and best practice to help reduce rejection rates.
The non-advised platforms and providers have been a little slow to adopt electronic transfers, many of the D2C providers use custodians/intermediaries and are waiting for their custodians to implement the new market practice before they can fully benefit from the electronic process. We expect to see adoption levels among the non-advised platforms and providers to improve from the middle of the year and accelerate towards the end of the year.
The main highlights of the first quarter were:
- 18 platforms and providers operate live electronic transfers, representing over 80% of AUA on platforms (9 use the Altus Transfer Gateway).
- 51 fund managers are now doing live electronic transfers, representing 90% of UK FUM (30 currently use the Altus Transfer Gateway).
- Many clients are now completing 75% of their account transfers and 90% of fund re-registrations electronically.
- Volumes continue to increase with over 20% increase of Q4 last year.
- 99% of fund re-registrations completing within the TeX SLA.
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