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Howard Finnegan at Altus Business Systems

Last year the members of TeX voted, by a very slight margin, not to publish any of the SLA data they collect on what happens with the transfer of investment portfolios and asset re-registrations.  This was a retrograde step; asset managers and platforms deciding they don’t want to tell consumers how well they are doing on transfers could lead you to think they’re not being open and transparent.

At a recent Altus Transfer Gateway (ATG) User Group we shared some analysis we gather from clients using the ATG Hosted Service.  I should explain, there are two implementation options open to ATG clients: they can install the software in their own data centres or they can use hosted or cloud based service.  The vast majority of our clients across all our products use the Hosted Service.  We analysed transfer data covering electronic and manual (paper) transfers from almost 40 client instances of ATG, including the biggest advisor, D2C and wealth managers.This covers around 70% or more of all electronic transfers during 2016.

The data we analysed covered ISAs and GIAs transfers, re-registration or encashment of funds, CREST securities and the transfer of residual or cash held on account between 1st January and 31st December 2016.

One of the first areas we looked at was the time it takes to complete a portfolio transfer from initiating the transfer to when the ceding party says the transfer is complete.  The results are quite interesting.  The graph below shows the percentage portfolio transfers (ISAs and GIAs) completed by length of time (in days). The key findings are as follows:

  • 40% of ISA and GIA transfers complete within one day.
  • 87% of portfolio transfer complete within five days and 95% within 10 days.
  • The remaining 5% can take up to 30 or more days.
  • The average time to complete ISA and GIA transfers is 15.5 days, just over two weeks.

The completion times for the vast majority of portfolio transfer cases improved during 2016, however, it appears that if a case did not complete with two weeks, the stubborn 1%, it was likely to take 30 or more days to complete.  Further analysis revealed that the majority of these cases occurred during the second half of the year, with a concentration in Q3 after the Brexit vote.We suspect these may be due to difficulties caused by the restrictions on many of the popular property funds.

If we factor out the extreme outliers, the average time to complete client portfolio transfers is under two weeks.This is just outside the TeX SLAs, but given the mix of electronic and manual transfers it’s not a bad result. As an industry however we should be doing much better.  I should point out that this is the time from initiating the transfer with the ceding party to the point the ceding party confirms the transfer is complete.  This is not the time the client or consumer will experience.Depending on the provider’s process and procedures, getting client authorisation in writing or online, discovery or valuation phase and any cash movement delays will very often need to be added.  They can add anything from a day or two to a week or more to the consumer experience.