JW: Why do you think the UK was lagging so far behind Australia when it came to platforms?
The market in Australia was driven by the announcement in 1983 by the then treasurer Paul Keating of a new regime for retirement funds. In order for there to be a proposition for advisers there had to be a marketplace, there had to be funds available for that to happen and this new pension regime supercharged the Australian market, which in turn led to the introduction of platforms.
The UK wasn’t really ready for what platforms could offer in the 1990s, except at the very high end. We came over in 1998, originally just on a visit to see what was going on in the UK, and realised that nothing was happening.
Skandia’s multi fund already existed and was quite popular although very expensive. But Skandia at that point didn’t really seem to understand what they had. There wasn’t an effort to turn this into a holistic financial planning solution. Having been doing this in Australia for 10 years just made it more clear to us what was likely if a proposition was launched, so we did.
JW: There have been some platform closures over the past few years. Do you think the advent of RDR will mean more consolidations or more closures?
I think the reverse will happen. I think there will be more platform based offerings the other side of RDR.
I think what you’re going to see on the other side of RDR is that the restricted advice model is going to be very popular. I think that advisers, faced with a difference in responsibilities associated with keeping their licence in a restricted or whole of market environment, are going to ask what they get apart from the ability to use the word independent and that’s about it.
If on the other hand they go down the restricted advice model route they can choose their own stable of products, which they can thoroughly research, and know it will match the client’s needs and when it doesn’t and not be shy about saying that.
I think that, in that environment, you’ll get groups of advisers that operate off a standard model and they’ll go to providers of platform engines and say “here’s the kind of feature set we’d like to offer, can you support it?” They’ll say yes and away the market will go. So I think it will fragment rather than join up.
JW: Have you any comments to make about the FSA policy statement 11/09 on platforms?