PlatformsSep 1 2014

Q&A: Ascentric’s Hugo Thorman

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There is no argument for trail commission. I don’t get it at all; it’s the provider paying the adviser instead of the client.

We always had adviser charging.What the RDR said is, “you were right”.

Clients get the advantage of seeing how much they pay their adviser, how much they pay the platform, how much for fund management. That’s got to be good news.

Superclean is a misnomer. They are all clean.

You’re not supposed to be able to affect the flow of funds if you’re an independent proposition so why have you got a better price? I can’t reconcile that with what’s been said in RDR.

There’s something wrong with the system if there’s any problem with transfers. The whole point is to facilitate transfers without any implications for the adviser and the client.

At the moment it costs as much to do an electronic transfer as a manual one. It’s getting better all the time but unfortunately that’s a phase you go through. It’s like that with everything on platforms.

Regulatory pressures have got in the way of technical innovation. The more distraction you get from imposed changes, the less time and money you’ve got to spend on change which is more positive for the end customer.

Advisers are amazingly demanding. We’re under permanent pressure to improve the service and that’s where we focus our time.

There are at least 30 platforms and they are all focusing their spend on only six technical providers. That means each technology is receiving funding from several platforms so you get more for your money fundamentally. It should get better all the time.

There’s bound to be some consolidation, but why can’t there be 30? There’s that many in the States.

The new retirement landscape is almost trivial for platforms. That’s the way they’re already set up.

The client is our end consumer. It’s the client’s money.

The adviser has made the introduction and we’re very thankful for that. Ultimately we provide a service to both, but the client is the client.

*We hope the client would be aware that their adviser is using us as a platform but that shouldn’t be the primary focus. Clearly the client is trusting the adviser to choose the right platform and they then trust the platform to look after their money for them because that’s our job.

I don’t see D2C platforms as a threat. Sometimes clients will be advised by their adviser and other times they will want to do it themselves.

The more sophisticated they are and the more time they have, the more likely they are to run a little bit themselves. Why shouldn’t that all be on the same platform?

Hargreaves Lansdown is saying all the time, “if you want advice we can do that bit too”. We’re saying it the other way round.

All of us get grief from advisers on service all the time. It’s really hard making platforms work.

We’ve got 3,500 funds on our platform, 350 fund managers, about 7,000 equities. Because so much of it is still manual, stuff goes wrong.

You only have to look at the number of people employed per million pounds of savings to see we still haven’t got it right. That’s not a failing – we’re trying to get to an end game.

We win people from other platforms because they say they have bad service. And we’ve lost people to other platforms because they’ve felt we’ve got bad service.

We do over 2m trades a year now. The chance of one of those going wrong is reasonable.

You test and test and test and test to make sure you can’t think of a circumstance where it will go wrong. You can’t program for all the circumstances.

I’ve found The FCA much more circumspect and helpful [than the FSA]. They are trying to improve the environment so the right behaviours come out of it.

There was a real struggle with platforms and the FSA, a refusal to really understand what they did. Now they’ve realisedplatforms are mostly a force for good.

We’ve got white label platforms which we provide for Openwork, which is restricted, but Succession is independent. The distinction is difficult to explain to the man in the street, but I think it works.

I’ve met clients of restricted advisers who are absolutely clever enough to totally understand the difference and know exactly what’s happening to their money, and who are really happy. It’s a free market.

Running and reading are my two favourite pastimes. There’s a cross between running and platforms; they’re both a bit masochistic.