There’s no doubt about it; advisers are under pressure to prove their worth. With so much focus on transparency, value for money and whole-of-market advice, advisers are constantly on the look-out for the best solutions for their clients.
A report by Deloitte earlier this year estimated that the value of platforms is to grow from around the £200bn mark to £600bn by 2018. However, to expect constant droves of advisers to turn to platforms as has been the recent trend may be a touch unrealistic. Many advisers have already moved a large part of their business onto platforms amid a boost in their popularity, so the number of new advisers available to do so going forwards will naturally slow.
Of course, there are some new initiatives such as non-advised sales using platform technology which are starting to gain some business, but the vast majority continues to be from advised sales.
As such, there’s more onus than ever on boosting assets under administration through business retention and attracting business from others, especially at a time when re-registration is becoming more widely acknowledged, better understood and crucially, easier to achieve.
Future growth in platform use will be guided by the quality of platform product offering. With more than 30 platforms currently available in the market, there is little doubt that the competition is stiff and platform providers will need to up their game if they wish to ensure that business comes their way.
Unsurprisingly, cost is right up there but it can be somewhat of a minefield to manoeuvre, with some platforms almost reverting back to the days of insurance company charges with a small charge here and a little charge there and everything starting to get lost in the small print. Advisers seeking to choose a platform should know exactly what level of involvement they want – are funds likely to be rebalanced regularly or switched to use capital gains tax allowance? This will certainly affect the charges levied by some platforms.
In addition, advisers are undoubtedly on the lookout for technology and the ease of use. The basics have to be there, such as client valuations and various reports including capital gains trust and cash histories but some of the other “technology” in place is simply dressing up the fact that the adviser is doing the work that was previously performed by the platform itself.
There is a real division over the tools offered by all the different platforms and advisers will want to ensure they pick the right platform for their clients’ needs. Some platforms offer their own risk profiler and asset allocations which can influence the funds chosen, whereas there are others that have shied away from this and would prefer their advisers to use independent tools and research. Platforms looking for greater market share need to identify their target audience and know what they need to trump their competition.
Building up a solid reputation and demonstrating financial stability certainly helps to trump your competitors; advisers want to know that they are placing their business in safe hands and work with a provider they have confidence in.