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Zurich backs re-reg to catch rivals in the wrap race

by Jun Merrett on Dec 06, 2012 at 10:00

Zurich backs re-reg to catch rivals in the wrap race

Despite being a late entrant to the wrap race, winning assets from existing players can make Zurich’s much-delayed platform a success, according to its UK chief executive Gary Shaughnessy.

Although wraps have typically targeted traditional life companies in their efforts to build business, Shaughnessy (pictured) is backing the advent of platform-to-platform re-registration to allow Zurich to gain assets from rivals.

It is a bold strategy, but Zurich has a lot of catching up to do in the platform market: while rival life companies Standard Life and AXA have well-established wraps and Aegon more recently launched its Novia-backed platform, Zurich’s FNZ-built proposition is yet to get off the ground.

Delayed launch

The Zurich Intermediary Platform has suffered a series of delays. Having originally been scheduled to launch at the end of 2011 and then in March this year, it is now expected to come to market by the end of 2012.

However, Shaughnessy is confident any lost ground can be more than made up through re-registration.

‘Platform-to-platform re-registration makes it easier for advisers to move assets, and that is going to keep us all on our mettle. If platforms don’t deliver, the assets will move away rapidly,’ he said. ‘In our case, not having any assets and launching now is an advantage as we haven’t got assets that might move across.

‘The feedback we’re getting from advisers is there are a lot of assets on different platforms, which advisers are looking to move, and we’re getting positive feedback about the demand for our platform going forward.’

Supermarket experience

While Zurich may be behind the wrap curve, Shaughnessy should know a thing or two about the platform market, having been UK managing director of Fidelity, parent of FundsNetwork.

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14 comments so far. Why not have your say?

Tom

Dec 06, 2012 at 10:55

Yep, I bet every wrap/platform is expecting the same thing and this has been the main thrust of their business plan for the past couple of years- "2013 is where it's at!"

But you know, with just about every life company platform failing to gain real tranction in the market, let alone be profitable in their own right, I doubt advisers will be busting a gut to Zurich's door anytime soon.

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Simon P via mobile

Dec 06, 2012 at 10:57

Conversely the £2.50 in FUM that they currently have on there may get moved off!! A bit arrogant to assume that post re-reg everyone will want to move assets to Zurich. If its so great why are they struggling to get FUM on there now. Arrived too late to the platform market.

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Sam Matthews

Dec 06, 2012 at 11:07

‘In our case, not having any assets and launching now is an advantage as we haven’t got assets that might move across'.

Not having assets is an advantage???????!!!! Ive heard it all now

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Phil Morris

Dec 06, 2012 at 11:22

Easy enough business plan - cut the Zurich platform costs to the bone, but still ensure you have the functionality to offer a quality service, and then offer the platform at 10bps and corner the market!

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Chartered Mark

Dec 06, 2012 at 12:29

Got a few issues with this.

First: Zurich have swallowed the FSA mantra that cheap = good. It does not. Only if it does the job well will it be used by IFAs. And let5s be honest, who wants to be among the first to risk a client relationship by sticking them with Zurich?

Second: Typical Zurich, a wee bit more than " a day late and a dollar short". Most IFAs will have a dozen reasons why they will not use Zurichs platform now, so unless they give a free Planet with each case introduced, they are going to struggle to get any action.

Third: Zurich has history of arriving late to the party, failing and dropping out without any thought of the customers, or in this case, the IFAs as well. (Example Zurich Bank. Not a bad product, but pulled within a year or so of the launch.) Who wants to bung them clients and then have to switch the clients in a couple of years, when Zurich pull out.

There are a lot of people in the industry who don't really know what the impact of RDR will be, (make that most) and Companies like Zurich are launching into the unknown, with a business plan that requires them to snatch market share from others, and hopefully acheive quantum that means they will not be the first to fail. The only problem is that as the platforms eat each other, and feed on the carcasses of the fallen, their sole method of reducing costs, seems to be sack some more staff, which almost always results in a catastrophic decline in service.

Prediction: OBE for Zurich. Out before Easter 2015.

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Gerry Cooper

Dec 06, 2012 at 13:02

Another chapter in the ongoing death throes of Life Companies as Investment Managers.

A Life Company Platform - Isn't that an oxymoron?

Standard Life might make it, maybe even AXA, but as far as I can see, the rest can start planning for retirement now.

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David Ferguson

Dec 06, 2012 at 13:32

Spot on Mr Cooper!

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Truly Independent

Dec 06, 2012 at 13:34

How do they envisage taking lots of business away from other platforms when their charging structure is only average priced in the current marketplace, 0.325% at £50k-£100k, which is where the bulk of wrap assets sit in the market - and why 3 decimal points, have they gone mad!

Also I'm sure that the FSA would want to see a justifiable cost advantage when moving assets from one platform to another, and surely this would be done on a client by client basis and not bulk transfers (which is the only way they would make significant traction in the market). A platform at its most basic level is just a facilitator of an investment!

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Truly Independent

Dec 06, 2012 at 13:37

All the platforms should concentrate their efforts on helping us IFA's migrate legacy assets more quickly, and efficiently rather than just trying to take business off each other!! Smacks of desperation!

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John Mackay

Dec 06, 2012 at 13:40

Zurich have to overcome a credibility issue I have had problems with their existing systems, run I believe by Capita, and am not confident about a new unproven wrap given these experiences and the presumption that the delays have been due to system problems so will wait to see that it does what they promise after all we know from experience that Pinnochio would not have had a career in Financial Services Companies.

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Simon P via mobile

Dec 06, 2012 at 14:50

Gerry - you are half right. There isn't enough room for all the platforms in the market and some will fold. The life co's though have the advantage of deep pockets and can support a price war via the profits they make on large legacy books off platform. I think Zurich are just too late though. Skandia are seeing more money move off their platform than on it. Cofunds will struggle I think ( all the supermarkets will). Transact have been around a long time but seem to be treading water. Aviva too late (should have got it right with their first wrap). My money for the winners is on standard, Axa and nucleus (in no particular order)

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Gerry Cooper

Dec 06, 2012 at 15:47

@Simon P - Skandia yes, but I haven't really thought of them as a 'Life Company' for some time now.

Aviva's (and L&Gs) strength is that they continued to be'Life Assurance' Companies, and will survive because of this, whether or not their platform offerings survive.

It also seems to me that the supermarkets, ie Fundsnetwork and Cofunds will, as a consequence of RDR, change to become closer to the Wrap model over time.

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Manjit Singh

Dec 06, 2012 at 18:04

Every month delayed will be a nail in their Coffin. It is a very tough cut throat market with well embedded platforms with significant assets under management .

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New Model Bob via mobile

Dec 07, 2012 at 15:37

Cofunds and Transact to go...Are you kidding? I agree Axa; SL will make it. Nucleus probably however believe the FSA will investigate their partner firms.Novia probably and Sippcentre. Once rereg comes in, Skandia and Funds network better have their systems working, cause assets will fly off them. May be a couple others who'll make it through consolidation, but for how long?

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