Wraps and platforms survey: Out with the old

This article is part of
Wraps and platforms – August 2013

Managing investments online seems pretty run-of-the-mill these days. But it was only a couple of decades ago that everything was done by pen and paper, mailing and cheques.

The platform industry has taken great strides, but it has not escaped the retail finance scrutiny. While advisers can sit safely knowing they have jumped the RDR hurdle, platforms still face three years of legislation settling into place.

A period of great change is upon the industry. The long-awaited platform paper, published in April this year, finally set in stone the rules operators must adhere to in the future. While this brought some level of clarity, platforms can effectively set their own schedules until the absolute deadline. This will inevitably cause headaches for advisers and clients but, in the meantime, choosing the right one – or more – remains vital. In addition, advisers have to consider how platform charges will affect their business models.

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Business as usual?

Table 1 outlines the platform details of all the major players in the market. The list is identical to last year, giving a strong basis for comparison in terms of customers and assets under management. Zurich was the only company not to disclose data, the same as last year, because it launched towards the end of 2012 so does not yet have a track record of figures.

Total assets under management to 1 June 2013 for the platforms that provided information reached £267bn, an increase of 25 per cent on last year’s figures. The total number of clients on platforms has also increased to 3.3m, a more modest increase of 2.6 per cent.

With the growth in assets far more significant than the number of clients, the obvious conclusion is that those who are already on a platform are putting more money onto it, getting good returns from their assets – or both. Undoubtedly many investors benefited from the stock market rally that ran up to the end of May, although some investments will have dropped since.

Looking behind the figures, almost all platforms have seen an increase in both assets under management and number of clients. Most have seen business boosted by 15 to 50 per cent, although there are some standout figures. Aviva more than doubled its assets to £1.8bn, along with a 60 per cent increase in the number of clients, which it attributed to its targeting of advisers matching the right clients to its platform.

True Potential saw its assets under management increase by 150 per cent – although moving from a relatively low base of £600m last year – and more than tripled its client base. Having launched on 21 March 2011, last year’s data reflected the first full year of operation and it is proving popular with advisers.

Access for all

With the RDR bedding in, there is a far greater focus on efficiency and cost. New ways of managing clients are developing, from a full-blown service to more of an arm’s length proposition. The platform world is evolving along with this need, providing different levels of access to advisers and clients to meet various requirements.