Deloitte: Platforms will need £40bn just to break even

The platform industry in the UK is set to shrink to fewer than 10 providers, which will need £40bn in assets just to break even, according to research from Deloitte.

The firm said the impact of lower fees post-RDR will squeeze margins on platforms and cause the number of providers to plummet from roughly 30 platforms today as consolidation kicks in.

Andrew Power, lead RDR partner at Deloitte, said: “The value of assets held on platforms is estimated to grow from about £200bn today to £600bn by 2018.

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“However, one consequence of the RDR is that margins will be squeezed with revenues for platforms likely to fall from about 30bps to 20bps.

“For a platform provider, this could increase the breakeven point from approximately £20bn of assets to about £40bn.”