UK investment platforms were introduced at the turn of the millennium and revolutionised the way advisers operate today.
They offer huge efficiencies. I remember the days of having to call five different providers to get a true picture of a client’s portfolio.
The efficiencies platforms have brought to the adviser space have made it much easier and more cost effective to manage clients’ assets. Without them the cost of advice would probably be three or four times what it is today.
But the FCA wants advisers to carry out due diligence on the suitability of a platform on behalf of their clients, when it is not the client that really benefits from its use, it is the adviser.
Fund providers typically charge more now to purchase from them directly and surely advisers have a duty of care to future-proof their clients’ investments?
None of this really matters to the client, other than the security of their investments and the costs.
So when it comes to due diligence and suitability, a lot of the focus has to be based on the efficiencies the platform offers, which in turn will drive client fees down.
Advisers run businesses, and for that business to be profitable, it needs to utilise tools that save time and therefore money.
Using more than three platforms in any one business, I would suggest, is inefficient and I think the FCA needs to understand that.
Nathan Fryer is director of Plan Works
