1 Client segmentation
Advisers should first identify which client segment they are focusing on and their specific needs, the report said.
Although it could be “daunting” to have to run the same process multiple times for many client segments, the Lang Cat urged firms to use the “same house views” to speed up the process.
It said: “We suggest finding a format which allows you to include multiple segments in the same report - this could be a grid system with more detailed appendices.”
Next, advisers should decide what is reasonable to judge platforms on and then ask platforms for that information.
The Lang Cat suggested missing out obvious things that every platform was capable of — such as holding an Isa — and instead sticking to the required pieces of functionality, such as dripfeed drawdown.
The report added: “Consider using a third-party tool for this...it’s a thankless task.”
3 Business information
Advisers are also urged to check the health of the platform provider, from size and ownership to profitability and financial strength.
The Lang Cat told advisers to “leave prejudices at the door” because it was “not OK to rule out the platform because you don’t like the CEO, or because you hate life companies”.
Platforms that do not satisfy the key questions should be knocked out this stage, the Lang Cat advised.
The next stage involves cost. In this stage, advisers should run some pricing scenarios that seem realistic for the client segment they are working with.
Those that are reasonable could be kept in the running at this stage.
The report added: “If you are nervous because you think some platforms might deal on price so you want to keep them in, that’s fine, you’ll get to them [later].”
According to the Lang Cat, advisers should have whittled down their platform choices to six or fewer by this stage.
6 Final selection
The report said: “This is where the skill and judgement come in. By this stage you have a list of suitable platforms. Your work is nearly done. Now it’s time for you to work out who you want to work with.”
When deciding from the shortlist, the Lang Cat suggested getting demonstrations and visiting the offices to meet the teams. Advisers should also start negotiating prices at this point, it said.
7 Lock the report
The Lang Cat recommended “narrating each step” — writing it down — and finalising the report so the firm can adopt it formally.
It added: “We recommend someone senior in the business presents the report to the board and you hold a challenge session, and set a date for when you will rerun the exercise.”