Three-quarters of wealth managers to begin live electronic transfers in 2014
Altus’ quarterly transfer market update shows the initiative now has over 80 per cent market coverage of UK fund platforms and fund managers, as of December 2013.
The update has highlighted that institutional fund platforms will join the rest of the industry by participating in live electronic transfers this year.
This development is expected to enable as many as 75 per cent of wealth managers to go live by the end of 2014.
Experts at Altus claim that the impact of the introduction of live electronic transfers to the wealth management industry will facilitate effective competition in the market, which will in turn deliver better outcomes for consumers.
Other predictions from the Altus transfer market update include:
1. More participants will deliver near 100 per cent coverage of funds – The remaining fund managers will go live. These include Intermediate Unit Holders, who will allow wealth managers and many from the D2C market to benefit from electronic transfers by the middle of 2014.
2. Transfer times will continue to decrease – As more counterparties enter the market to deliver near 100 per cent market coverage (based on AUM) transfers completed in five to six days will become the norm.
3. Increased regulatory pressure – There will be greater scrutiny from the FCA who will question organisations holding investments in nominee structures and failing to completing with the RDR requirement for completing transfers ‘in a timely manner’.
4. Pension transfers will begin – Altius expects to see a wide range of pension providers benefiting from an open, interoperable and automated process, transferring pensions in days.
5. Share class conversions will be included in the transfer process – The industry, led by TISA, is close to agreeing a standard for the completion of share class conversions as part of the transfer process. Once this is agreed implementation of automated solutions will follow quickly.
Ben Cocks, products director at Altus, says: “Last year was an exciting time for the electronic transfers and re-registration market. Following some teething problems in the early part of the year, the second half saw a dramatic improvement. There are now 16 platforms operating live electronic transfers; over 50 per cent of which use the Altus Transfer Gateway.
“Encouragingly, there are now five vendors providing solutions which are all interoperating successfully. This is a positive step forward for promoting the benefits of open standards within the industry and we are confident that the recent inclusion of pension transfers and intermediate unit holders to the open standard will further encourage competition in the market this year, which will be good news all round.”
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