Graham Swan: Six steps to avoiding re-platforming pain

Suspended log-ins, delays in income payments to clients, spiralling costs, aggrieved advisers and long-lasting brand damage - migrations and re-platforming projects have become essential but high-stakes endeavours. And, according to analysis by The Lang Cat, approximately 90% of adviser assets on platforms are likely to be affected by serious disruption if things do not change.

Unfortunately, migration and re-platforming woes are clouding the importance and benefits of these transformative processes. When the implementation is complete, re-platforming and the transfer of client data to enhanced systems can significantly evolve client propositions by delivering seamless custody and dealing services, increased access to a broader range of investment solutions, and improved customer interfaces.

Moreover, much of the impact associated with recent high-profile migration and re-platforming projects can be diminished or eliminated. Indeed, by following guiding principles from the outset, platforms can navigate the majority of problems.

Understand the art of compromise

According to McKinsey, 70% of all projects fail in their stated ambition, leaving the probability of success at just 30%. So how can platforms tip the odds of success in their favour?

Not only do platforms need people who understand the business and the technology, they need to understand they will never be able to deliver all things to all people. A good rule of thumb is to understand you must keep 90% of existing business and open access to 90% of your future predicted growth. This means separating ‘nice-to-haves' from ‘must-haves' and making tough decisions about business strategy.

Show leadership on both sides

To deliver a successful project requires strong leadership from both the platform and its strategic partner when outsourcing. Compromise means having the strength to make pragmatic decisions about what non-core business may or may not be appropriate moving forward.

So, while some regression might need to be factored in, this process will achieve a far more efficient long-term proposition with the potential for far greater growth capture. In this respect, platforms should highly value honesty from their strategic partner before undertaking a migration or re-platforming project. They also need to ensure the leadership team has the commitment to see a project through to its finish.

It is also important to understand and respect the technology. Often, we see firms buying an efficient, reliable solution like the platform equivalent of a VW Golf but then expecting it to behave like a Ferrari, when this is simply not possible. When acquiring technology, you need to undertake due diligence on what is realistically achievable from the outset.

Safeguard client assets

While everyone's idealistic vision of a platform may not be quite achieved, pragmatic compromises will ensure an enhanced but also stable and efficient platform. At the end of the day, the number one priority should be safeguarding client assets, whether cash, securities or private data.

Keeping assets safe might not be top of the agenda at the outset of an innovation-focused project but, as it progresses, all parties will realise this is always the bedrock and therefore the most important factor. Ultimately, protection, functionality and being able to keep a service running day-to-day are what bolster the trust of clients and form an excellent base to build on.

Do not underestimate importance of testing

Most post-implementation problems are rooted in the failure of pre-launch testing procedures. Here, platforms must ask the right questions. Does the platform have a time-tested project management team and knowledgeable stakeholders who will ensure testing is robust and comprehensive?

Does the implementation team have the relevant expertise and track-record of delivering successful outcomes for platforms, advisers and underlying clients? Would independent oversight from a technology partner create more robust testing? And can this partner also deliver value and credible market intelligence to the provider?

It is crucial testing should not be done by a standalone testing or project team. It should be a defined process across the business and undertaken, particularly, by those who will be operating the systems on a day-to-day basis.

Ensure effective communication

Experience is crucial in delivering effective communication, which is the bedrock of successful re-platforming or migration. Projects can vary greatly in terms of complexity and involve multiple stakeholders - for example, an external consultant may need to sit in the middle of two technology vendors to deliver the project. Are all of these teams communicating effectively - and is testing being considered from all perspectives before the actual transfer of client data?

Experience should also be instructive of the right time to go live. Rushing a project can create major issues post-implementation and a host of unintended consequences. And it is impossible to overstate the importance of model office-testing to establish the whole client journey is not negatively impacted.

Good communication should also broaden to all stakeholders. Providers should ensure advisers are aware they must also take responsibility for understanding changes to their business and communicating the changes to clients.

Identify synergies

Platforms must also consider the broader question of the level of strategic partnership required. It is crucial platforms fully map out the level of service and contingency required prior to undertaking the migration or re-platforming.

Choosing a best-of-breed strategic partner allows platforms to concentrate on their core capabilities, while bringing an alternative viewpoint. The right partner should ensure seamless straight-through processing across new systems and the removal of risk around any client asset requirements. It also helps for a strategic partner to be regulated, so they have a responsibility not only to the client but also to comply with regulatory standards in their own right.

Moreover, regulation-driven best execution requirements demand unique expertise. As MiFID II continues to take hold, dealing and custody responsibilities will come more into light with the publication of RTS 28 reports. Does the platform have the requisite expertise to navigate these changes and can they demonstrate all regulatory requirements can be met?

Instead of elevating the industry's reputation for focusing on providing positive outcomes and evolving services, re-platforming chaos and teething problems around migrations are tarnishing the reputation of the platform industry. By collaborating and planning effectively with experienced strategic partners that can provide independent expertise and oversight, disruption can be diminished. It is a well-worn phrase, but ‘failing to prepare is preparing to fail' in re-platforming.

The reality for the platform industry is the retail client is evolving. Increasingly more tech-savvy, the retail audience now demands seamless customer journeys, such as those frequently experienced through interactions with trusted tech-driven brands such as Amazon and PayPal. In this new environment, platform disruptions are more likely to prompt both advisers and clients to consider switching providers. The good news is this can be prevented.

Graham Swan is business development manager at Winterflood Business Services

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• Topics
• Platforms
• Wrap/platforms
• re-platforming
• Winterflood