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How do advisers view platforms in 2014?

This article is part of
Adviser Technology - November 2014

The Financial Conduct Authority confirmed in April 2013 that all legacy business on platforms will be required to move away from rebates by April 2016.

Under the ‘sunset clause’ advisers increasingly under pressure to switch clients over before time runs out.

Recent research by Investec published in October this year suggested that many IFAs will not be ready for the ‘sunset clause’ deadline.

Some 80 per cent of intermediaries believe that some advisers will struggle to fully complete the transition from commission to fee-based remuneration before the April 2016 deadline, according to the research.

Elsewhere, some platforms have been working on restricted advice propositions to meet adviser and client needs in a changing environment post the Retail Distribution Review.

Aviva is working on a project to roll out ‘focused advice’ services to its platform that advisers could use when working with clients that cannot afford full advice.

Equally, the pensions reforms have piled another layer of pressure onto the platform space.

Many platforms have cut their charges in the wake of the Budget announcement. In April this year, Aegon and Cofunds cut their platform charges.

In July this year, Aviva scrapped its drawdown charges following the Budget announcement. Old Mutual Wealth followed suit in October this year scrapping its drawdown fee and minimum investment charge.

With platforms existing in an ever-evolving environment, it seems fitting to ask advisers how they see the role of platforms changing and what the expectations on them are, as well as advisers’ own expectations.

How many platforms and how often to review them?

Most advisers use a host of platforms to choose from to meet their ideal needs and cater for their clients most efficiently.

Daren O’Brien, director at Aurora Financial Solutions, said that the firm currently uses Fidelity FundsNetwork, Cofunds, Elevate, Zurich and Nucleus, with each having good points for different products.

He said that the firm annually reviews the platforms used and the CIP for the year at the same time, but this will be reviewed mid-year if platforms change pricing or issues are encountered.

Mr O’Brien said: “This gives us a guide initially on which ones to use for a particular client, but ultimately it depends on the client’s specific needs/products.”

Paul Lindfield, director of wealth management at Sedulo Wealth Management said that the firm currently uses three platforms: Standard Life, Zurich and Fidelity FundsNetwork.

Mr Lindfield said: “Although we are a relatively newly authorised firm of less than two years, I did have a client bank that had legacy business on platforms. We were keen to select a platform provider that best suited our clients and our needs in the post-RDR world rather than just inherit platforms through legacy.

“We selected Standard Life as our main platform provider due to financial strength, tax wrappers, funds, and functionality in addition to other aspects such as unbundled share classes available, and bulk share class conversions.