Mark Polson: The ideal time for a platform review

Mark Polson: The ideal time for a platform review

Ah, autumn. As the mists roll in and orchard fruits ripen – and all that poetic stuff – the financial services industry snuffles to life like an inverse hedgehog hibernation. That is to say, the hibernation is inverted, not the hedgehog itself. It may or not be inverted; that’s irrelevant for our purposes today. Glad we’ve cleared that up.

Anyway, the point is that autumn is a fabulously busy time of year for platforms and technological Stuff that companies would like advisers and clients to use. There’s a perfectly rational reason for this. If you’re eating it on your 2017 numbers at this stage, October and November won’t save you, and not much happens in December. 

So what you’ve got to do is concentrate on getting it together in the fourth quarter, so you have all of the kit that you and your guys will need for 2018. 

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As a result, we’re seeing a lot of programmes coming to fruition right about now. That doesn’t necessarily mean you’re seeing new kit and functionality out in the wild yet, but if you can peek behind the scenes at your favourite provider, you’ll probably see some developments hanging around backstage near the props table.

Familiar names

Some of this will be exciting new stuff, but sadly this year a lot of it will be related to the two big ‘must-do’ programmes I went into last time – Mifid II and the General Data Protection Regulation (GDPR). 

We’ve been doing some asking around about readiness for Mifid II at adviser firms and providers. We found about four providers who we’d say are all over it, and a whole bunch who are going to be working very hard over the festive season. As far as advisers are concerned, the most common response we had was ‘what on earth is that?’ Which is not promising.

Outside of must-dos, we are looking forward to seeing Alliance Trust Savings and Ascentric move through their replatforming phase and get back into business as usual. Both platforms offer a different slant on what is becoming a very vanilla (at least at a superficial level) market, and both have had protracted replatforming issues.

Interestingly, both pride themselves on their exchange trading capabilities, and making sure that these capabilities are properly plumbed in is likely to have been at least some of the reason why these providers have spent longer on replatforming than anyone anticipated.

A good deal

That issue around dealing capabilities for exchange-traded assets is pretty interesting – at least for geeks like me – because it’s one of the few areas where you see genuine differentiation between platforms.

 I know most advisers aren’t using exchange-traded funds (ETFs) or investment trusts all that often, let alone individual equities. But usage is on the up, constrained a little by the fact that any advantages in asset range or liquidity over mutual funds is all too often outweighed by punitive trading charges. 

It’s no shock, then, that ATS and Ascentric, along with AJ Bell, Seven IM and Raymond James, are all reporting higher usage than average of these types of assets, and all offer all-in charging that includes exchange trading or very cheap trading.