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Aviva and FNZ up a tree, R-E-PLAT-FORM-I-N-G

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Just a quick few thoughts on the news from Aviva today that it plans to migrate its platform from Bravura to FNZ.

For those not intimately involved, Bravura and FNZ, along with GBST (disclosure: GBST is a client of ours) are the three big beasts of outsourced platform technology in the advised space. IFDS is coming up on the rails with its SJP and OMW implementations, and over in D2C-land JHC Figaro is pretty popular, but those three are the big names at the moment.

Aviva’s been in a funny position, with FNZ powering its nascent direct platform and Bravura (who predated FNZ in yellow-and-blue land) doing the advised stuff. After a slow start, Aviva Platform (still a terrible name) has picked up speed and is sitting in a not unadjacent space to £9bn AUA. So this is quite a big undertaking – we think it’s the second biggest replatforming exercise so far in the UK, just behind Ascentric moving £10bn to Bravura from its own Bluebutton platform. So it goes. Swings and the other things you get in playgrounds.

Actually, Aviva was going to need to replatform anyway. Its version of Bravura’s Talisman platform was due for a sort of end-of-life upgrade to the new Sonata platform. This is the journey Nucleus went through last year; and those involved will tell you that while it wasn’t as hard as changing to a completely new platform, it still wasn’t easy. Not even in the neighbourhood of easy.

So something was going to change, and it makes sense for Aviva to use just one piece of kit rather than two. The move to FNZ means that it has a clean sweep of the bigger lifeco platforms, with Aviva, AXA, Standard Life and Zurich all using that kit. Along with its other accounts, we reckon c. £60bn of UK platform assets (in today’s money) will sit on FNZ’s estate by the time this is done.

As an aside, Bravura is up for sale, and while this news will doubtless have been available on an NDA basis for prospective purchasers and analysts involved in considering an IPO, it’s still not great timing.

FNZ will supply administrative and custodial services, we think, to Aviva. That’s a further change away from Genpact, who used to be Citi, who used to be Scottish Friendly Admin Services (not quite as simple as that, but I’m at 360 words already and time’s a-marching). There’s a debate out there about whether there’s any virtue in having admin done in the same place as tech; FNZ will say it’s better, Bravura and GBST will say it’s not such a big deal. You pays your money (quite a lot in this case; Aviva says it’s ‘low tens of millions’ but it’s a long way into its FNZ spend journey already) and you takes your choice.

This will be the first advised replatforming onto FNZ that we’re aware of; everyone else has built from the ground up (SL, AXA, Zurich), or is a first-time platform tech user (Santander, Hornbuckle). So this will be a great test which those of us interested in the space will be watching very closely.

As I’m fond of saying, there is no recorded instance of a replatforming going well. It’s always a schlep. I notice that Aviva is saying that advisers won’t see any difference in the web screens they use – this is a dangerous game. I’ve seen a number of platform developments skid out of control on the basis of changing the user interface. I hope and trust both Aviva and FNZ are all over this already, but that’s definitely a potential pinch point. Quite pleased with that bit of alliteration there.

There is one certainty in this – that stellar communication from Aviva to its supporting advisers is crucial. ‘Don’t worry, ‘appen, it’ll be grand’ is not a sentence anyone should be hearing from our Yorkshire friends. Advisers need to know what’s going on, when, and if there are any bumps along the way then keeping schtum in case someone tells the papers is not helpful. Memories are long, and though Lifetime was a lifetime ago, the ghost of that particularly painful episode still stalks the halls of Welly Row. It can’t be allowed to happen again; to be fair to all at Aviva no-one knows that better than them.

If you’re an Aviva supporter, buckle up. Prepare to be forgiving, but demand transparency at all times. If you’re a competitor, think twice before pointing fingers and laughing at any problems that might occur. It might be you one day, or it might have been you in the past. Schadenfreude isn’t what we need.

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About Mark Polson

lang cat founder and boss. Expert on all things platforms, pensions and investments. Prolific writer and public speaker, even when people ask him not to be. Knows more about Scandinavian black metal than you, and isn't afraid to prove it.