In Focus: Profitable advice business  

In-house platforms 'not right for majority of advice firms'

In-house platforms 'not right for majority of advice firms'

Proprietary adviser platforms have their place but will not suit the majority of advice firms due to a lack of skills, according to Mike Barrett, consulting director at the Lang Cat.

Speaking on the FTAdviser In Focus podcast Barrett said: "The technology barriers have fallen down really really rapidly. The bigger issue I think is the adviser skillset and the ability for the firm to adopt and implement that particular change."

He said if the skills were present a proprietary platform could be a very good solution for an advice firm and its clients but failing that "most firms shouldn't go near it".

David Ferguson, founder of Nucleus and new CEO of platform technology provider Seccl, agreed.

"There is a thing about ... for advisers to have control over the proposition," he said. "Ultimately advice firms really want to have more control over what they are doing and what they are delivering to their customers.

"They tend to have a lot of control over their offline proposition, when you come into their office, how that feels and how they train their people and that's how they communicate. But then often that ultimately ends up being compromised or constrained by what they can do online.

"So for me, whether you get into white labelling or literally building something yourself at the extreme end, this is more about what do you want to have as your online proposition for your clients."

Seccl provides the tools and infrastructure for advisers who want to run their own platform. Its clients range from small fintechs to large advice firms.

But Ferguson said: "Mike's point is the right one that you have to have a certain skillset in the business and a certain orientation about how you do this. 

"If advice firms are confident in who they are and what their brand is and that's what they are selling every day then I think this could be for them."

To hear more about how advisers can benefit from running a proprietary platform, and what effect the consumer duty will have on the way advisers work with platforms, click on the link above.