“Standard Life assimilating Axa Elevate and Parmenion is a corporate consolidation to an extent and has not yet played out into the technical space. They have not consolidated the books of business, although the view in the industry is Standard Life will have to do so at some point.”
Lee Coates, director of Ethical Investors, feels the IFA community and its clients have borne the brunt of the commercial decision made by the platform companies involved in the Aegon Cofunds merger.
He said, by far, clients have drawn the shortest straw.
“We thought we had problems with Aviva last year but this Cofunds Aegon thing has been a nightmare," he acknowledges.
“We are at the borderline of almost breaking Financial Conduct Authority (FCA) rules because some of the things we are required to do under 'treating customers fairly' are nearly impossible to do. If I say to you ‘I think you should switch from fund A to fund B’, I do not know whether it will work.”
Mike Barrett, consulting director at Lang Cat consultancy, understands how disruptive things can be when using technology that is being overhauled.
But he believes advisers bear some responsibility as well.
"I would say to an adviser, if you are using a provider that is going through any kind of replatforming, you can expect significant problems and you should think about how to address that and mitigate risk and engage with support material provided to you," he suggests.
“In some cases that last point [engaging with support materials] has not helped.
“The buck stops and the problem starts with the provider making the changes, but will advisers feel they have taken all the steps to mitigate risks when they look back?”
When it goes well
Though on a much smaller scale than Aegon and Cofunds, it is worth noting Embark’s successful example of a platform consolidation.
After a high court case, the Avalon platform with its £300m of assets and 50,000 clients, applied to go into special administration.
Subsequently, it was bought by Embark which has its own platform run on FNZ technology.
In November 2017 Embark stated it was planning to migrate the assets it has on Avalon over to the FNZ platform. Embark managing director, Phil Smith, confirmed to FTAdviser this migration was completed towards the end of last year.
When it comes to lessons learned, Mr Okusanya says that is tricky because as yet there has been no large-scale example of platform consolidation that has gone well.
