On average, Barry Neilson, business development director at Nucleus, says firms are now using two or three platforms.
Of course, the FCA also expects platform use to be augmented with recourse to off-platform investments.
This increases the options that need to be considered, but also allows an adviser to limit the number of platforms required to remain independent if they can show they are able to offer whole of market advice.
Mr Neilson says a lot of firms are using two platforms for new clients and they will also have at least one ‘legacy’ platform, at least in the lead up to the sunset clause next year.
Mr Neilson says: “The use of this number of platforms may be driven by a concern that using more than one platform is required in order to satisfy independence criteria.
“It is an understandable concern, but the regulator has never stated that adviser firms need to use more than one platform. Indeed, the FCA paper PS13/1 essentially states that using more than one platform could defeat the benefits offered by a platform.
“Ultimately, the number of platforms will be determined by client segment requirements.”
The perfect number of platforms for an adviser to use will vary on a case-by-case basis, says Stephen Wynne-Jones, head of marketing at Cofunds.
He says an independent firm will likely have different client segments with different needs and a single platform is unlikely to provide the ideal service for each segment.
Therefore, Mr Wynne-Jones says as a firm develops its client proposition in order to service each group they will need to match to a platform to meets those needs.
Having choice and flexibility to use one platform over another doesn’t necessarily mean complexity, Alistair Wilson, head of retail platform strategy at Zurich, points out. He says in his experience advisers use between two and four platforms to deliver their client services.
But while Mr Wilson says advisers should use as many platforms as required to deliver the full range of services they want to their clients consistently, they should also look to keep the cost of delivery for the business and the client down.
He says: “What makes good business practice will vary between different firms, and will depend on the breadth of their client’s needs.
“Some people want high quality and are happy to pay more for it - think Waitrose - while others want the lower cost solution - think Aldi. Advisers should consider which platform propositions are best suited to meet client needs.
“A word of caution, relying on a single platform carries risk for the adviser and the client, just as it does in other industries. To me it makes sense to have more than one.”
