In the space of little over a decade, platforms have gone from being a nice-to-have business tool for cutting edge advisers, to an essential device underpinning all transactional activity.
But despite being fully embedded in the day-to-day advisory process, the market is still nascent, and shows development year on year. Often prompted by regulatory shifts as much as product innovation, the wrap and platform space continues to evolve and this year’s survey presents a considerably different landscape from last year.
The most notable changes can be broadly split into two types. There are those that may come to represent a sector-defining trend, such as the increase in direct-to-consumer (D2C) offerings from platforms that previously only dealt with financial advisers; or there are those where factions are appearing, as different companies try to take platforms in different directions, for example in the different products they are beginning to offer beyond simple investment vehicles.
If the products are going to underpin everything an adviser does, they really need to offer access to all the products involved in a full, holistic financial plan. But before even considering protection and mortgage products, the investment offerings are typically far from comprehensive.
Considering the products should be innovative, the wrap market as a whole has repeatedly proven remarkably conservative in terms of the products it makes available. Investment trusts - a big winner in terms of popularity among retail investors since the RDR - still do not find a place on many platforms and several were slow to offer ETFs.
The funds that are available have been argued to be subject to a far from level playing field too. The RDR has obviously introduced greater transparency to wrap business, but the practice of platforms negotiating their own deals with the fund management groups has raised a few questions about fairness.
The process was brought into stark relief by the scrum that met the inaugural fund launch from Woodford, which saw a number of platforms scrapping to secure the best deal to entice investors.
Hargreaves Lansdown emerged with the best deal, offering the fund at 0.6 per cent, five basis points lower than its nearest competitor and 15 below the standard unbundled rate. But several commentators have questioned the fairness of this outcome, wondering whether, in a post-RDR, transparent world, all investors should pay the same rate.
