Bulk platform switching is a critical topic for our sector, yet it remains undefined as a process.
Our research found that advice firms collectively lose an estimated £517m annually due to inefficiencies in platform switching. When boiled down to its pure essence, a significant portion of this cost sits at the door of poor data quality – at scale.
The impact of poor data quality is evident as early as the pre-switch validity assessment, where success depends on both data quality and the ability to interrogate it intelligently. Many firms lack the necessary insights to effectively and efficiently determine the viability of their client bank.
If they make it past this hurdle, the next step is conducting an appropriate analysis to arrange clients into cohorts. Traditional segmentation with the Consumer Duty is no longer an option. So, the process of cohorting must now be determined by the best (which may not be obvious) appropriate characteristics, including vulnerabilities.
The introduction of the Consumer Duty regulations places greater responsibility on advisers to ensure that clients are on the most suitable platform
A suitability report (or assessment evidence) is required for most advised cases, yet as a process, poor data quality impacts confidence in the report. Add to this the client consent process, which is inconsistent and depends on the firm’s client agreements and authorities to act on behalf of the client, with either express consent, negative affirmation or as part of their discretionary permissions.
Once the switch is instructed, communication gaps between ceding and receiving platforms delay and add cost to the process. Without real-time tracking, firms and their clients are left in the dark – prompting anxious chasing calls as they try to get answers.
Despite these complexities, the need to define and enable bulk switching has never been more urgent. The introduction of the Consumer Duty regulations places greater responsibility on advisers to ensure that clients are on the most suitable platform, driving more frequent reviews of platform arrangements.
The rise of challenger brands and consolidation across the advice sector also accelerates the need for large-scale asset migrations as firms seek to streamline operations and align with preferred technology providers.
Without clear guidance at the outset of a transfer, firms often encounter unexpected risks and delays
While there is some progress, significant unknown-knowns and barriers remain. Stats around bulk switching remain incomplete, making it difficult to establish clear benchmarks for success. Initiatives like STAR have made strides in setting industry performance standards for individual transfers. However, without a widely accepted definition of what constitutes an efficient switch, firms lack clarity on best practices and performance expectations.
Another issue is the inconsistency between in-specie and cash transfers. In-specie transfers should be the default method, preserving client investments and avoiding unnecessary market exposure. However, the industry continues to struggle with re-registrations, with some fund managers still requiring faxed forms despite ceding and target platforms using a transfer vendor like Equisoft.
Without clear guidance at the outset of a transfer, firms often encounter unexpected risks and delays, increasing the chance of disruption for both advisers and their clients.
Beyond the execution of the transfer itself, the ability to seamlessly move data between platforms and adviser systems is critical. Opening new platform accounts must be frictionless, ensuring clients and advisers can continue operating without interruption. The movement of client data from one system to another should be automated and secure, avoiding manual rekeying and reducing errors. Integrations between platforms and CRMs must be improved to provide real-time visibility throughout the switching process.
By switching in bulk using available automation, advice firms can complete the process in weeks
Take a firm with £100m to move from Platform A to B. Alongside better servicing and investment options, the switch could save clients £50,000. Traditionally, this would happen one transfer at a time during individual reviews – taking up to 12 months. By switching in bulk using available automation, advice firms can complete the process in weeks, putting savings back in clients’ pockets much sooner – just as the Consumer Duty intended.
For bulk switching to become a viable, scalable process, the industry must align around three core priorities.
First, data quality – so advisers can confidently assess and cohort clients for switching. Second, integration – bringing modern technology to the forefront to streamline operations, cut manual interventions and minimise errors. Third, clear regulatory frameworks and widely adopted industry standards – to ensure consistency and clarity across the market.
Platform switching is not about waiting for change – it is about making it happen.
Nicky Sevel is CEO and co-founder of Woven Advice
