LONDON, May 2 (Reuters) - The wealth management arm of Anglo-South African financial services firm Old Mutual has switched provider for an IT system it said on Tuesday, adding the change did not affect Old Mutual’s break-up plans.
The firm is planning to break itself up into four parts by the end of 2018, including a likely listing of Old Mutual Wealth, but the cost of the platform upgrade has worried investors.
The upgrade could take longer and cost more than initial indications of 450 million pounds ($578.79 million), Old Mutual chief executive Bruce Hemphill said in March.
Old Mutual Wealth has terminated its contract with IFDS for the platform, switching to FNZ, it said in a statement, due to “increased concerns about further extended timescales, quality of delivery and consequential increased costs”.
It said it had incurred costs for the upgrade of 330 million pounds as at end-April 2017.
Preliminary costs for the FNZ system are 120-160 million pounds, Old Mutual Wealth said, and it should be operational by late 2018/early 2019, “with migration to follow swiftly thereafter”. ($1 = 0.7775 pounds) (Reporting by Carolyn Cohn; Editing by Rachel Armstrong)