There has always been a tension in how advisers select platforms. On one hand, platforms are products, recommended to clients, who generally pay for them. On the other, they are services primarily used by advisers. Platforms therefore serve two masters, with subtly different requirements. However, a shift in perception is occurring, according to our latest UK Adviser Platforms: Platform Selection report.
The ‘platform as product’ approach has dominated for some time. Selection on a client-by-client basis may have ‘optimised’ individual client suitability, but it has bred inefficiencies for advice firms. Multiple platform use means more admin, staff training and potential for mistakes – risks and costs that are ultimately passed on to clients.
The drive for efficiency is leading to different thinking. The average number of platforms used by advisers has slowly decreased, and platform selection has evolved. Advisers increasingly regard platforms as the administrative ‘plumbing’ for clients’ investments.
Adoption of adviser-controlled platforms is one symptom of this shift. Larger firms are more likely to go down this route, pioneering for greater control of their advice process.
Another symptom is heighted transfers between platforms. Over half of advisers have transferred assets in the last 12 months – many citing cost and service as primary factors.
Use of fewer platforms is yet to reduce the total number of platforms in the market. But with increased platform switching, winners and losers are bound to emerge – with the inevitable consolidation to follow.
Platforum recently published UK Adviser Platforms: Platform Selection, our mid-year update of market size and analysis of major market trends. For more information, please get in touch.