Left standing at the platform

Platforms, which combine a choice of investments and tax wrappers, together with tools and services for research, administration and client servicing, are very widely used by IFAs.

In fact, recent research found nearly 90 per cent of advisers use a platform in some form and most (73 per cent) use more than one. But the use of platforms, like the platforms themselves, is still evolving. The findings show that there is still all to play for in this growing market, as the handful of large, established players face an array of new entrants.

For anyone who thinks that a platform is where you wait to catch a train, some definitions are in order.

The research asked IFAs how they defined their primary and secondary platform, from four options: a fund supermarket, which offers a wide range of mutual funds at discounted terms on a single platform; a fund supermarket with added features, as before but with additional services and tools; a wrap, or a platform intended to act as a central hub for an adviser’s business in terms of client servicing, administration and other functions; and an investment proposition, which offers a wide range of investment services, particularly discretionary fund management, and tools on a single platform.

In response to these definitions, just over 40 per cent, said their main platform was a wrap, while just under 40 per cent described their main platform as a fund supermarket with added features.

This split between wrap users and advisers content with a fund supermarket was a feature of the research, but it should not be seen as an unbridgeable chasm. Over a third of advisers believe a fund supermarket meets their needs already, but at the same time, relatively few rule out using a wrap; only around a tenth of advisers think that a wrap is not suitable for their business or their clients.

As wrap is intended to provide a more comprehensive service to advisers than a fund supermarket. It is not surprising that they are markedly more popular as an IFA's main platform, while fund supermarkets are more popular as a secondary platform. This can be seen as evidence of IFAs adopting wraps, but still retaining fund supermarkets, either for legacy business or certain client segments.

When the platform definitions were cross-referenced to IFAs' main platforms, we can see how advisers define some of the different platforms out there. Transact, for example, is seen by the great majority of its users as a wrap, whereas most Cofunds users see it as a fund supermarket with added features. Seven Investment Management's users are evenly split on whether it is a wrap or an investment proposition and Skandia, Raymond James, Novia and FundsNetwork also have a mix of user views on what type of platform they are.