Howard Finnegan
Transfers and Re-registrations Market Update – Q1 2015
Written by Howard Finnegan on
The first quarter of 2015 saw continued steady growth and improvements in the use of electronic transfers and re-registrations.

Despite having more live participants the number of transfers executed electronically was marginally above the same quarter last year.  We have some circumstantial evidence suggesting the overall number of transfers was below last year’s volumes, but the percentage executed electronically was significantly higher at over 80%.  

The volumes of rejections of electronic transfers has dramatically reduced when compared with the previous two quarters, this is mainly due to a number of key participants implementing changes to their automated solutions.  The vast majority of account/portfolio transfers (over 90%) complete within the TeX 6 days SLA.

At the end of March 2015 there were 110 TeX members supporting live electronic transfers and re-registrations, covering over 80% of AUA on advisor platforms and 86% of UK fund managers FUM.  The number of D2C platforms and wealth managers supporting electronic transfers continued to increase, we estimate close to 70% of AUA on D2C platforms can now be transferred electronically.

The open standards approach to pension transfers received a considerable boost when, in February the Department of Work and Pensions (DWP) selected the UKFMPG messaging used in electronic transfers as the standard to support the Pot-Follows-Member initiative.  This is a significant governmental endorsement of the use of open standards and a major boost for opening up pension transfers across the industry.

The main highlights of the first quarter of 2015 were:

  • 14 of the top 20 advisor platforms are live with electronic transfers representing over 80% of AUA (7 using the Altus Transfer Gateway or 68% of AUA).
  • The top 8 D2C platforms are now executing live electronic transfers covering an estimated 67% of AUA on D2C platforms (7 using the Altus Transfer Gateway).
  • 10 Wealth Managers and Private Banks are now supporting electronic transfers (7 using the Altus Transfer Gateway).
  • 69 fund managers representing 86% of UK FUM are supporting electronic transfers and re-registrations.
  • DWP selects the UKFMPG open pension transfers as the standard to support the Pot-Follows-Member initiative to go live in 2016.
  • Version 2.1.1 of the transfers standard, which included changes to pension transfers to support the new ‘freedoms and choice’ went live in March 2015.
  • Majority of client portfolios transferring within 6 working days, many completing within just a few minutes.

During the remainder of 2015 we expect to see continued growth of the Transfers and Re-registration market and predict the follow developments;

  • The remaining major advisor platforms will begin supporting the electronic transfers and re-registration, representing over 90% of AUA.
  • Significant growth among the D2C platforms and execution only brokers to levels similar to that of the advisor platform market.
  • Continued growth of adoption of electronic transfers among the major Wealth Managers and Private Banks.
  • Significant growth in the use of open transfer standards to speed up the pension transfer process to support the new pension freedoms and the DWP’s decision to adopt the standard to support Pot-Follows-Member.   
  • Continued development of the open standards through the UKFMPG, ISO 20022/SWIFT.  Version 2.2 in June to support new TeX SLAs and version 2.3 of the standard in November to support multiple minor enhancements and changes to the ISO 20022 messaging standards.

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