M&G’s purchase of Royal London’s adviser platform Ascentric for an undisclosed fee was revealed this morning and the firm has set out some of its plans for the £14bn assets under administration technology.
The firm said its motive behind the acquisition was in line with its growth strategy for the UK retail savings market where it "sees demand for advice and reliable investment solutions growing because of the shift to self-provision for retirement," according to M&G chief customer and distribution officer David Macmillan.
Macmillan also said Prudential's With Profits fund, which was £76.8bn at 31 March 2020 and is part of M&G, would remain a separate proposition to the Ascentric platform, confirming it is "not migrating anything to or from either party… they are complementary".
He added: "We will broaden availability of our solutions capability across the market on the back of this deal. That includes PruFund".
Ascentric currently serves 1,500 advice firms and 90,000 individual clients, who hold a total £14bn assets with the platform.
Macmillan added: "This deal strengthens our position in the UK savings and investment market, complementing our existing offering to advisers and customers. Ascentric's well-established platform will also accelerate our ability to provide a wider range of M&G and Prudential investment solutions to more customers through the tax wrappers and service propositions they and their advisers favour."
The Ascentric platform will be integrated into M&G's business over time and current chief executive of the platform Rob Regan will continue in his role. The deal is estimated to receive regulatory approval and complete by the end of the year. Macmillan said the platform would effectively be dropped into M&G's existing customer and distribution structure.
The firm does not yet have a clear vision for the Ascentric branding but it assured it would change and would be clearly labelled as "a core part of M&G".
Ascentric's re-platforming process was both expensive and tough for the life company. In March 2019, Ascentric revealed it had spent more than £100m on its long-term re-platforming project over the course of the previous three years.
Then, in May, the new platform offered up some hurdlesfor advisers as some users complained about the client reporting functions and others reported extended waiting times with the call centre. It also had to delay some of its re-platforming migrations at the last minute.
And to allay concerns of advisers and clients who had struggled through the re-platforming, Macmillan said Ascentric will continue to operate on its re-platformed version of Bravura Sonata technology and the offering will remain the same.
Macmillan continued: "It will be business as usual for Ascentric clients and we will support that leadership team to further develop and enhance that business for our advisers and customers."
'Due to three factors'
Continuity beyond 2021
Customer numbers rise an average 3.1% across all providers
Defer to 2021/2022
Restructure costs at £3.5m to date
Founded firm in 1973