Transferring investment portfolios and the re-registration of assets using the open interoperable electronic standards provided by TISA Exchange (TeX) continued to progress during the first quarter of 2016. The number of counterparties now supporting electronic transfers increased in the quarter, there are now 120 organisations listed on the TeX register. The volume of transfers were marginally higher when compared to Q1 2015. However, when you consider the increase in the number of participants it suggests it was a quieter Tax Year End ISA
We’ve seen ISA transfer times drop dramatically, during March over 90% of electronic in-specie ISA transfers between counterparties completed within 3 days! As more participants achieve higher levels of straight-through-processing (STP) for transfers we expect to see transfer times continue to fall. The number of participants supporting the latest version of the open transfer standards, version 2.2, (GIAs, ISAs, Pensions, funds, CREST securities, cash and other assets) has also increased.
The highlights of electronic transfers market during Q1 2016 are;
- 15 of the top 20 advisor platforms are now supporting electronic transfers representing almost 86% of AUA on advisor platforms (8 using the Altus Transfer Gateway or 66% of AUA).
- 14 of the top D2C/execution only stockbrokers are now live with electronic transfers covering over 80% of AUA on D2C platforms (11 using the Altus Transfer Gateway).
- 16 Wealth Managers and Private Banks are now supporting electronic transfers (7 using the Altus Transfer Gateway).
- 91 fund managers representing almost 83% of FUM in UK Retail and Institutional funds are supporting electronic re-registration.
- 4 custodian and intermediaries are now supporting electronic transfers.
- First cross-border fund providers (Dublin domiciled) are now supporting electronic transfers.
- Over 90% of in-specie ISA transfers between electronic counterparties are completing within 3 working days, many completing within just a few minutes.
So what can we expect to see during the remainder of 2016;
- A growing number of participants supporting UKFMPG version 2.2 of the transfer standards and those who don’t are preparing to support the new version 3.0 toward the end of 2016.
- Continued growth adoption of electronic transfers among the D2C/execution only stock brokers and wealth managers.
- More cross-border fund providers supporting UKFMPG electronic transfer standards.
There are further opportunities to develop the UKFMPG transfer standards to address the following challenges;
- In-specie pension transfers. With the growing popularity of self-invested pensions on platforms, as a direct response to pension freedoms, the demand to transfer pensions and their assets in-specie is increasing. Clients and consumers can transfer ISAs in days and they can’t understand why it takes weeks or months to transfer pensions.
- Transfers between Cash deposit ISA and Stocks & Shares ISA. Since the equalisation of ISA allowances there’s been a steady rise in demand to automate this process and bridge the gap between the proprietary BACS cash ISA transfer system and the open standards.
- Junior ISA and the transfers-in from Child Trust Funds is another area of growing demand.