2017 was quite eventful on the electronic transfers and re-registrations front. The number of participants increased, and the volume of transfers increased quite dramatically during the latter half of the year.
The number of organisations supporting the TeX legal framework and open standards transfers has increased over the year to almost universal coverage in the adviser platforms, D2C and Execution Only Platforms, Wealth Managers/Private Banks, Custodians/Intermediate Unit Holders and Fund Managers market segments.
Five providers offer different solutions that all successfully interoperate across two versions of the open transfer standards, to allow ALL participants to transfer electronically. The following is a summary of the main market segments:
- 20 Adviser Platforms, representing 94% of AUA, support electronic transfers
- 19 of the top 20 Adviser Platforms support electronic transfers
- 13 Adviser Platforms support the latest version (v3.0) of the transfer standards representing 67% of AUA
- 12 Adviser Platforms use the Altus Transfer Gateway (ATG) or 61% of AUA
- 24 D2C and Execution Only Platforms support electronic transfers
- 9 of the top 10 D2C providers support electronic Transfers
- 19 support V3.0 of the transfer standards, 20 use ATG
- 28 Wealth Managers and Private Banks support open electronic transfers
- 24 support v3.0 of the transfer standards; the same 24 are using ATG.
- 5 Custodians/Intermediate Unit Holders support electronic re-registration
- 4 use ATG
- 96 Fund Managers represent 86.2% of FUM of UK retail funds now support electronic re-registration.
- Almost all readily available UK retail funds can be re-registered electronically.
Big Increase in Volume of Transfers
During the first half of the year the volume of ISA and GIA transfers remained fairly constant, just edging up every time a new counter party started supporting electronic transfers. From late summer however, we began to see significant increases in transfer volumes. In the second half of the year alone, volumes increased by 70% between July and December, with the bulk of the increase in the last three months of the year.
So why has there been such a huge increase in volumes? Some of it can be apportioned to a general increase in number of new ISAs and the growth in the number of electronic counter parties. However, we believe the majority of the increase can be attributed to the number of platform migrations (re-platforming) and the disturbance these projects cause. We’ve been involved with four bulk migrations involving tens of billions of pounds of assets, tens of thousands of asset lines and hundreds of thousands of investment accounts.
Given the planned platform migrations and full re-platforming projects planned for 2018 we can expect this level of transfer activity and volume to continue.