PlatformsSep 3 2015

Aviva says D2C platform will not compete with advisers

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Aviva says D2C platform will not compete with advisers

Aviva told FTAdviser about the non-advised consumer platform back in June, with a spokesperson stating it would be further developed over time, complementing existing adviser and corporate platforms.

This followed plans for the Aviva Consumer Platform being announced last July, stating it was aimed at tackling the ‘advice gap’ created in part by the Retail Distribution Review.

Rodney Prezeau, Aviva’s consumer platform director for retirement solutions, told FTAdviser he saw the D2C offering as “expanding the pie” rather than being a threat to advisers, pointing out “as these customers wealth increases, decisions and complications potentially get bigger and there will be more need to seek paid advice”.

The platform will encourage consumers to obtain full personal advice before making major decisions about their retirement, but he added that for some it is simply not in their interests to pay full advice fees, given their circumstances or investable assets.

As for the issue of so-called ‘orphan clients’ - those introduced by an adviser, but who have since lost contact - Mr Prezeau said that Aviva is going through the logistics of contacting them.

“We want to respect the adviser relationship, but if all the data shows they are truly orphaned then we would reach out to them and see what they are looking for, be that re-starting with an adviser or going direct.”

Those execution-only platform clients without an adviser will be referred to network Tenet, while Friends Life customers will continue to be referred to Foster Denovo advisers, after the national adviser established the deal in April.

Aviva’s new system also hosts an open-architecture investment offering, built from scratch and powered by technology provider FNZ.

Both the Aviva Investment Isa account and Aviva Investment account will be available on the platform, along with the self-invested personal pensions account, with drawdown functionality provided for when customers wish to start using their retirement savings.

Those using the direct platform will be sign-posted to seek financial advice if they require it at key decision points, such as choosing whether to access their pension pot under the new pension freedom rules.

The provider stated the consumer platform has a simple and transparent charging structure, with no charges on entry or exit and fees set out over various asset bands: 0.40 per cent for the first £50,000 of assets, 0.35 per cent for the next £200,000 of assets, 0.25 per cent for the next £250,000 of assets and no fees on any assets over £500,0000.

Fund-based charges also apply, with a core management charge on customers’ total assets (excluding cash) rather than on separate products.

Customers will be able to see all of their investments in one place, with the ability to transfer existing pensions and Isas to the platform, consolidating more assets and reaching lower price tiers.

Mel Kenny, chartered financial planner at Radcliffe & Newlands, said: “Quite simply a financial advisers worth and business is in the planning and the advice. Those happy to bypass the adviser are expensive people to chase after and therefore direct propositions should complement.”

Phil Stevenson, chartered financial planner at Ark Financial Planning, said he did not have a problem with the move, pointing out Aviva is probably pitching at the lower end of the market for individuals looking to execute transactionally and cannot afford to take advice.

“I am looking for clients who want to engage with an adviser, who see the benefits of working with an adviser and are prepared to work with an adviser over the long term.”

But Harry Katz, consultant at HA7 Consulting, was rather more disparaging of the move, stating that “after a very short time using this new platform people will begin to realise the value of using an adviser”.

peter.walker@ft.com