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Dramatic increase in market coverage for electronic transfers

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The number of platforms and fund managers supporting live electronic transfers and fund re-registrations has reached a new high with over 75 per cent market coverage, according to research by Altius.

The news comes on the back of recent comments from the Financial Conduct Authority (FCA) stating that re-registration progress has been "less than satisfactory”.

Whilst experts at Altus agree that there are still many firms who are yet to sign up for re-registration, latest research from the firm shows that the number of completed transfers using the electronic messaging has increased dramatically between July and September this year with volumes over double the previous quarter.

At the end of September 14 platforms representing just over 80 per cent of the assets under administration (AUA) and 37 fund managers representing 75 per cent of UK funds under management (FUM) were operating live electronic account transfers and fund re-registrations. 

All the live transfer participants are using the open interoperable standards based on the UK Funds Market Practice Group’s (UKFMPG) Transfers market practice, ISO 20022/SWIFT messaging and all are operating within the TISA Exchange (TeX) legal framework, vindication that open industry collaborations can deliver real benefit to consumers.  

The average time to complete electronic transfers is between two and five working days, five or six times faster than paper based transfers.  Some Altus customers are achieving up to 70 per cent STP (Straight-Through-processing) rates on transfers.

Ben Cocks, products director at Altus, says: “Whilst the FCA is right to stress the urgency of the need for those firms who are yet to sign up to make progress with re-reg, we have recently witnessed a significant growth in the number of platforms, fund managers, suppliers and volumes of automated transfers which is good for the industry and the consumer. It demonstrates how open and interoperable standards can drive down costs, improve efficiency and deliver better outcomes for the end investor.  The next challenge is to extend the model to the wider investment and pensions industry.”

Matt Benson, head of operations at Cofunds, says: “We’ve been a vocal supporter of an industry-wide solution to platform-to-platform registration for some years now, so it’s encouraging to see processing times falling significantly as additional platforms, administrators and fund managers join the initiative. We’re also seeing a greater level of co-operation between platforms which will of course ultimately benefit advisers and their clients.”

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