There has been a noticeable shift in the importance that advisers and planners attach to the quality of service – or ‘ease of use’ as it is sometimes described – provided by platforms.
In all the surveys of advisers that I have seen in the past 12 months (and that is at least five) the emphasis has shifted from being almost entirely focused on cost.
The importance of service has always been recognised, whether that be from adviser to client or platform to adviser, so why is it that it seems to have gained more importance in the past year?
There are, I suspect, a number of reasons. The greater number of platforms tried by advisers the better they are to be able to draw comparisons. This certainly seems to be borne out in the Coredata 2011 survey of more than 700 firms where interviewing the same firms a year later there was a 100 per cent increase in the number of advisers who placed service in the top three most important aspect of choosing a platform – up from 24 per cent in 2010 to more than 50 per cent in 2011. I have noticed similar trends in at least four other surveys published this year.
Another reason that might be influencing the search for better ‘ease of use’ is the shift in the services that advisers are now required to provide to their clients to justify the charges that the client now has explicitly to pay to the adviser.
At first many seemed fixated on price alone, including the FSA, and that led advisers who were coming somewhat belatedly to the world of lifetime financial planning to feel safe from criticism if they chose what was, ostensibly, the cheapest platform.
After a year or so they discovered, what several thousand advisers had discovered earlier, and that was there is no such thing as excellence on the cheap.
There are some clients, whose needs are simple and who are perfectly well suited to the old simple fund supermarket model, but the moment you have a client who requires a far more complex financial plan, the shortcomings of that model quickly become apparent.
The enthusiasm with which many advisers have adopted cashflow modelling and lifetime planning lays bare the need for things such as model portfolios, capital gains/loss calculators, cash accounts within each wrapper, access to the full range of funds or securities as well as a full range of tax wrappers. Other tools such as asset allocation, portfolio interrogation and cashflow modelling become essential.
In the end, the service that financial advisers and planners need from platforms in order to provide the best for their own clients falls into two areas. The first is information and activity on the internet that enables advisers to carry out functions themselves if necessary, such as re-balancing model portfolios, buying and selling any asset, access to data without having to keep masses of paper.
Also, no matter how efficient such systems are there will always be a need to enlist help from human beings.
The upgrading of software systems should have as its primary aim the freeing up of administrators, whether they are sitting in the adviser’s office or the platform’s, to allow them to meet and talk to their customers.
Malcolm Murray is head of marketing at Transact
