Platform merger and acquisition actitivity that results in an increase in costs would prompt the vast majority of advisers to move their assets to another provider, according to CoreData Research.
The firm surveyed 1,000 advisers in June about the impact of platform consolidation, finding 85 per cent would switch platform providers if costs increased following a takeover.
A slightly smaller proportion of advisers, 83 per cent, would transfer their clients’ assets if there was a fall in service levels after their platform merged with another.
Meanwhile, half of advisers said if their main platform entered into a merger deal, they would stop registering new assets on their core platform until due diligence was carried out on the new entity.
The findings come at a time of heightened movement in the industry, following last week’s announcement that Aegon had agreed to buy Cofunds for £140m, with the merger taking assets under administration to around £86bn.
In May, Standard Life reached an agreement to buy Axa’s platform Elevate, bringing the total assets to £36.4bn.
According to CoreData, two thirds of advisers were worried about their main platform being affected by consolidation, with 42 per cent of those concerns revolving around the extra administrative work that would need to be undertaken in order to meet compliance.
Will Roberts, senior consultant at the research firm, said the demands of regulatory compliance, margin pressures and digital disruption mean many platforms are finding it increasingly difficult to achieve scale.
CoreData findings also suggested advisers’ business on platforms could stall, should the Cofunds deal trigger a lengthy period of consolidation.
Mr Roberts said the “economic fundamentals” would suggest Aegon’s consolidation with Cofunds could lead to a prolonged shake-up of the entire platform industry, pointing to the CoreData research which indicated this would be a big concern for advisers on both platforms.
In a separate report, CoreData found advisers’ concern over platform “regression” had surged, and said the sector was now at a “critical juncture”.
katherine.denham@ft.com
