Fidelity spent £80 million on its FundsNetwork replatforming project in 2018, its financial statements have shown.
For the year ending 30 June 2018, Fidelity said the group acquired ‘a partnership interest, valued at £80 million in a newly formed partnership holding intellectual property relating to the new developed strategic investment platform. This capital acquisition was funded by a capital injection from the company’s parent FIL Limited’.
A spokesman for Fidelity confirmed this £80 million figure related to its replatforming project, in which it will move to Bravura technology.
‘Fidelity is in the final stages of completing one of the biggest and most successful technology upgrade programmes in the market. This figure relates to investment we have made in upgrading our platform technology to Bravura’s Sonata administration system,’ the spokesman said.
This replatforming project has been going on since 2014.
Fidelity's financial statements also noted administrative expenses increased 3% in 2018. The replatforming project was cited as a ‘key contributor to the expenses figures reported for the past three years’.
In total, administrative expenses were £739.1 million for 2018, up from £716.3 million in the previous year.
Fidelity’s operating profit for the year was £101.5 million, up from £82.1 million in the previous year.
In 2017 Fidelity reported an administrative issue relating to the setup of a ‘small percentage of our DC [defined contribution] pension scheme client base’ over incorrect information.
In 2017 the provider set aside £22 million to cover ‘potential liabilities’ arising from the processing error in its DC business. For 2018 this figure was £11.5 million.
Fidelity also said it has made remediation payments of £1 million to clients affected by the error during 2018.
‘The group continues to focus on making sure all impacted clients are identified and informed that the process of remediation, where necessary, is carried out as quickly and fairly as possible. It is expected most of the provision will be utilised and paid to clients by the end of December 2018.’