I know an adviser – get me, eh? – who is a prodigious and loyal user of a certain platform. In the face of shifting prevailing wisdom, through thick and thin, he and his team have hurled assets at his chosen partner, and over the years have amassed what platform financial directors like to call ‘significant AUA’, or what normal people would call ‘more money than you can shake a stick at plus the stick’.
He is also an avid, if frustrated, user of a large back-office system as one might expect.
Now, of the two he much prefers the platform – he knows the people, they treat him with courtesy and respect, and do their best to pick up the pieces when it all goes sideways, which is sadly all too frequent. He hates the back-office system with the heat of a thousand suns and will sound off about it to anyone who will listen, and many who won’t. If you see an angry guy shouting about reconciliations on the Tube, that’s him.
Despite this, he is very clear. The second he can place trades and rebalance portfolios from his back-office system, he’ll never log into the platform again, and nor will any of his people. He may be exaggerating slightly, but only slightly.
What’s the point?
Our man’s point is this: if his business is to be scalable, he has to get fragmentation minimised. Administration in successful businesses is not done on multiple systems, which only rarely and often grudgingly speak to one another. There is one point of data aggregation, one point of control, and the administrator spends all day, every day, in that one environment. In a post-RDR world, with spiralling regulatory costs, falling margins, increased capital adequacy requirements and all the rest of it, he needs his staff to be ninja-level on one system, not competent on many.
This is a battle which those interested in financial technology used to talk about a lot in the late noughties. It was called ‘the battle for the adviser desktop’ and it was sort of like Game of Thrones, except with less sex and dragons. Much, much less sex. And no dragons at all, if I’m honest. Sorry.
Anyway, the big fight was between platforms and back-office systems as to which would be the ‘point of aggregation’ for advisers. The idea is that if you are the point at which all the various bits of data intersect, then you really are in control. Logistics companies know this. If you have all the widgets in a bunch of containers, no-one’s getting their widget delivery without you being in a good mood and having your invoice paid. Amazon, for example, is a very good logistics company, with a website attached.
In our sector, whosoever controls all the data controls the triggering of Doing Stuff, which leads to fee income, which leads to big promotions and one of those office chairs which has armrests and everything.
So who won the battle? Well, no-one, really. There is no one system from which advisers can run their entire business. Administrators have to be ninja-level in several systems. And if you think that doesn’t matter, try being one. I remember being shown by one deeply frustrated admin person that a certain lifeco platform forced you to go digging in the back office when adding a new client. But every time you did and spent more than a few minutes without the platform as your active window, it timed out and you had to log back in and start again. Dual screens didn’t help, and Prozac and absinthe cocktails only made a slight improvement.