Even in the midst of a global pandemic, transferring investments between providers carries on. In fact, since the UK lockdown in March, we have seen a big increase in the number of live electronic counterparties and in the volume of electronic transfers. Between April and September 60 new counterparties entered the electronic transfer age. There are now just over 420 live counterparties across the savings and investment value chain supporting electronic transfers and asset re-registrations, up almost 100 the same period last year.
We have also seen the volume of electronic transfers increase by over a third over the same period last year. Some of that increase can be attributed to the larger number of counterparties supporting the TeX open transfer standards but not all of it. It seems that the pandemic has highlighted to the need to take paper out of the account/portfolio transfer and asset re-registration process.
By any measure this is impressive and one of the best kept secret success stories in the financial services industry. Hats off to TeX for the success and for keeping it secret.
The bulk of the growth in new participants this quarter has been from the Wealth Management/Private clients and fund manager market segments. We’ve also introduced a new segment to cover those organisations now supporting the TeX/open standards for pension transfers. Here is a summary of the coverage in the main market segments:
26 Adviser Platforms, representing 99.7% of AUA, support electronic transfers.
- All the top 20 Adviser Platforms support electronic transfers.
- 17 Adviser Platforms (or 57% of AUA) use the Altus Transfer Gateway (ATG).
35 D2C Platforms and Execution Only Brokers support electronic transfers.
- 9 of the top 10 D2C providers support electronic Transfers.
- 29 use the Altus Transfer Gateway (ATG).
95 Wealth Managers and Private Clients support electronic transfers.
- 91 use the Altus Transfer Gateway (ATG).
51 White Label/Family Office/Charities.
- 38 use the Altus Transfer Gateway (ATG).
7 Custodians/Intermediate Unit Holders support electronic re-registration.
- 6 use the Altus Transfer Gateway (ATG).
194 Fund Managers support electronic re-registration.
- Represent 95% of UK Retail Funds by FUM
- 52 (or 57% by FUM) use the Altus Transfer Gateway (ATG)
15 Pension Providers support open standards based electronic transfers and re-registration.
- 9 use the Altus Transfer Gateway (ATG)
What can we expect for the rest of 2020 and 2021?
The focus for anyone involved in TeX and the UK Electronic Transfers and Re-registration Group (UKETRG) is preparing for the implementation of the FCA Policy Statement 19/29 ‘Making Transfers Simpler’. The FCA delayed it until 1st February 2021 due to COVID-19. The Policy Statement and new COBs rules mandate that ceding parties must allow share class conversions where necessary as part of an in-specie transfer. The new open standards support automation of conversion across the entire fund value chain, and as we approach the deadline, we expect to see the majority of the key market participants supporting electronic conversions as part of the transfer process.
Over the next six months we expect to see the number of live counterparties continue to increase with some significant brands in key market segments join the electronic transfers club.