Following on from Money Management’s sister title Financial Adviser reporting there is increasing pressure on IFAs who use just the one platform, we asked advisers whether they think it is possible to be classified as a truly independent adviser should you use just one platform.
Matthew Walne, director, Santorini Financial Planning, says of course you can
“Simply, the answer is ‘yes, of course you can’.
The FCA has made this very clear so I’m not sure why there is an ongoing debate. If you have a lot of similar clients in terms of demographics and needs, then why would you need more than one platform? Having multiple platforms available doesn’t make you any more or less independent. As long as you do a fair and unbiased analysis of the market then I don’t see what all the fuss is about.
As long as the platform you use offers the accounts most clients need, which is an Isa, pension and general account, you can go off-platform when required, then really it’s that simple.
We predominately use Nucleus. Apart from fact it ticks all the boxes when it comes to our accounts, it is different as it’s a community-based platform and it’s less provider-led. We have a say in what goes into it. The service angle in terms of how it helps the adviser is unparalleled.
Most platforms are commodity-driven and all the prices are the same. There’s not a lot to choose between them.
If you’re looking after someone who is wanting to invest in VCTs for example, then they aren’t available on any platform anyway.
As an industry we have a habit of overcomplicating things. If you keep it simple, then the clients don’t care what platform you use. They want to know about their money. Clients don’t get too bothered by a basis point here or there. Advisers get agitated by it but clients don’t.”
Frances Kemp, independent financial adviser, Nurture Financial Planning, says there is no such thing
“There’s no such thing as a platform that does everything. But it depends what you say is ‘independent’. It should mean you have to offer the whole of the market, so it has to include all the qualifying types of pensions and not just the standard options.
Some platforms can cope with offshore investment bonds and others can’t; It is the same for legacy plans such as with-profits. If you’re dealing with bog standard investments, pensions, Isas, you could elect to have just one platform. And we do have just the one in that respect.
We have used Platforum and we use its research, which then filters into what we need for our client bank and helps us to get the right fit for the majority of our clients.
For our standard investments, we have our one preferred platforms, but because we are an independent practise, we do look for Qrops and Qnups, for example, so we need to have another platform that can cater for that.
One of the reasons we use a platform is to help with administration. It feeds into our back office systems and produces regular reports for our clients. I think by taking advantage of these technologies, you can be more efficient and offer better value. We need to provide the service and be cost-effective.
The market is changing all the time. I don’t feel anyone could implement one platform and be done with others. You need to check ongoing suitability with platforms and assess your client banks.”
Danny Cox, head of advice at Hargreaves Lansdown, says there is not a one platform strategy
“What does a platform do? At its heart it is an administrative system which consolidates and simplifies a client’s pensions and investments making them far easier – and in many cases – cheaper to manage. Therefore having more than one platform is counter intuitive and productive.
Independent financial advisers who are able to find one platform which offers the best combination of investment choice, first class service and price need to look no further. In reality there is no such thing as a one platform strategy as a tiny proportion of clients may be best suited with an alternative system, for example if commercial property purchase is a requirement.”
Dean Aitchison, investment manager at KMD Private Wealth Management LLP, says so long as their client base is not too diverse
“In short, yes a wealth manager can be independent and only use one platform, so long as their client base is not too diverse. The greater the similarities between your clients needs and circumstances, the higher the likelihood you can remain independent using just one platform. In reality this probably works best for a small group of ultra high-net-worth clients where charges among platforms tend to become fairly equal, thus allowing you to select a platform that best supports independent advice, provides good security and service, whilst still remaining competitive.
The more selective your are in the clients you take on is also key to this model working but client circumstances and financial markets evolve over time which means a ‘one platform business model’ may allow you to operate independently today but not forever.”
Alan Solomons, director of Alpha Investments and Financial Planning, says you can be independent with only one and restricted with two
“This is yet another area where the FCA have not necessarily understood things or thought things out properly. Or maybe they are just sending the wrong sound bite.
Yes you can be independent with only one platform and not independent with two or more. If you have two or more platforms and never ever research the market to see if you still are using the best or most relevant platforms for your clients, then you are not independent. That is not to say you should change – unless the benefits are sufficient to justify the move – as this is expensive and disruptive.
If you have one platform and your client base is similar then why add to complexity by having more than one platform? There is no point. You must, however, reconsider when you get each new client. “Is the platform I am using suitable for this new client?” In addition periodically you should look at the market place to ensure that you are not materially disadvantaging your clients and your own practice.
In essence a platform is a trading platform that comes with certain additional tools that may or may not be useful and facilitates advisers fees. There are ways of checking the market easily for instance Capita’s Synaptics. However, you may need to ask even more questions like do they allow you to re-register soft closed or closed funds. Do they let you rebalance using these funds? If not, maybe that is not the platform for you.”
