Legacy Assets
ITM are founding partners in LAS, a service to ease and enable the migration of legacy assets held in adviser back office systems to platforms. The LAS service provides a flexible, TCF and compliant process for identifying legacy clients with old products suitable for upgrade, transfer or consolidation.
Driving Business Transformation - Legacy Asset Systems (LAS) provide flexible, TCF and compliant processes for identifying and processing legacy clients with old products suitable for upgrade, transfer or consolidation. The service is particularly suitable for IFA businesses seeking to move to a 'wealth management‘ business model.
LAS provide a range of services to ease and enable the migration of legacy assets held in adviser back office systems and electronic sources to superior alternatives such as platforms, Wraps and destination funds. These services provide a wide range of advantages to advisors and their clients and are particularly beneficial for IFA businesses seeking to move to a wealth management business model.
The Challenge
The financial services industry has changed almost beyond recognition over the last few years. The global financial melt-down, the development of more sophisticated products and increasingly stringent regulation has put even greater pressure on advisers to ensure that they recommend the most appropriate solutions for their clients. In light of recent economic events, it’s more important than ever that, advisers review their investment approach and ensure that their clients have portfolios that still meet their objectives. When carrying out this review, it’s more than likely some changes will be required and investments will need to be moved.
The Regulator
The FSA are keen to encourage active management by advisers with regular reviews to ensure that the clients’ portfolios meet their objectives. However, they want to ensure that assets are not being moved unnecessarily to remunerate the adviser, hence it’s important that there is demonstrable evidence that the transition will ultimately be for the client’s benefit. And of course, the costs and consequences need to be clearly and carefully explained to that client.
The Opportunity
Standard Life estimates that there is £1.9 trillion of legacy assets held in products suitable for migration onto a Wrap platform in the UK. The majority of these assets are held in products that may be unsuitable for both the client and the firm. Often these are expensive and poorly performing investments. But who are the individual clients? Liberating them and transferring assets benefits both the client and the firm. Being able to identify these opportunities from within a client bank is the first step in the journey.
How we do it
1) The First Phase - Identifying the individual clients suitable for transfer to the new proposition:
From data in the back office (and electronic sources) systems of advisory firms ITM (as its part of LAS) compiles a segmented list of clients with legacy products and funds potentially suitable for transfer to a superior proposition, in keeping with the impetus and requirements of Treating Customers Fairly and the Retail Distribution Review.
We undertake an analysis of the whole existing electronic client databank to identify, sort and segment clients who may be suitable for product or fund upgrade. Even assuming that current fund values are not immediately available, our report will provide a very good idea of;
- Value of total asset base
- Who has the money by client
- Who has the money by provider
- Where is the money by product type
- Potential to increase recurring income
At the same time, a “Data Quality” consistency check will be utilised to include analysis of accuracy of information. Our analysis tools and processes generate an in depth summary of the clients affairs and the salient results are compiled into a presentation pack for the adviser to go through with their client. A full Investment and Asset Migration Report is produced to assist in covering the regulatory needs of any transactions that go ahead.
2) The Second Phase - Delivering a robust, TCF and compliant process for completing the upgrade, transfer or consolidation:
We undertake an online calculation and illustration process producing personalised client reports showing a detailed cost comparison and suitability report. This includes a choice of cost comparison by reduction in yield or difference in projected fund values. Cost comparisons include full costs (such as switching charges, normally left out in provider own RIY illustration) and IFA admin charges (also not included in provider illustrations). There is the option of a bespoke Para-planning service for more complex cases saving time and underpinning the compliant process.
Visit the LAS site for more details - http://www.legacyassetsystems.com