New research from Platforum looks into the pricing of adviser platforms, running a series of pricing comparisons across a range of portfolio sizes for both buy and hold investors (low turnover) and model portfolio investors (high turnover).
The adviser platform market grew by 25.4% in the 12 months to 30 June 2017 but the average charges across the adviser platform market remain flat year on year:
- 41% is the average charge for £100k portfolios
- 29% is the average charge for £500k portfolios.
Below are the cheapest platforms for a model portfolio investor with a £100k scenario and a £500k scenario.
| £100k portfolio charges | £500k portfolio charges | ||
| Ascentric | 0.30% | Alliance Trust Savings | 0.13% |
| Aviva | 0.30% | Hubwise | 0.12% |
| Cofunds | 0.29% | ||
| FundsNetwork | 0.30% | ||
| Hubwise | 0.31% | ||
| Parmenion | 0.30% | ||
| Raymond James | 0.30% | ||
| Source: UK Adviser Platform Pricing Guide, Platforum, October 2017 | |||
Low charges aren’t everything – what is arguably more important is that are delivering good value for money. When we plot scores for value for fees charged from advisers against platform charges:
- 7IM and Transact both have relatively high charges and are perceived as offering good value for fees. They occupy a sweet spot in our matrix.
- Aviva, AJ Bell Investcentre, Alliance Trust Savings and Parmenion all have competitive charges and are perceived as offering good value for fees charged.
Andrew Ashwood, Research Associate says: “The adviser platform market saw a steep decrease in charges in 2013 following the retail distribution review (RDR). Since 2015, however, average charges have held steady. Many platforms have tweaked their pricing structures in the last year – Transact and Nucleus have made reductions to their charges whilst Ascentric has completely revamped and simplified its pricing structure.
“The largest platforms are in the strongest position to implement disruptive price changes – we see increased scale acting as an enabler of bringing down charges for the end customer. However, many of the scale players will have to recoup the costs of expensive technology upgrades so may be limited in their ability to bring charges down in the next 18 months.
“The average advisory firm holds 40% more of their assets on their primary platform than on their secondary platform, so this presents a massive opportunity for platforms to move their secondary and tertiary users up the value chain. We expect basis points to be shaved off for portfolio sizes above £200k to capture a greater share of wallet.”
Download a sample of UK Adviser Platform Pricing Guide
Notes for editors
For more information about the report findings, please contact
- Andrew Ashwood, Research Associate, andrew.ashwood@platforum.co.uk, +44 (0) 20 7970 4760
- Miranda Seath, Head of Intermediary Research, miranda.seath@platforum.co.uk, +44 (0) 20 7943 8049