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Parmenion chief: 'Why we don’t seek to compete with the really big platforms'

Parmenion chief: 'Why we don’t seek to compete with the really big platforms'

The chief executive of the up-for-sale Parmenion platform wants the company to stay focused on its current operations, rather than try to broaden its offering to take on the larger firms in the sector. 

The platform is presently owned by Standard Life Aberdeen, and was put up for sale earlier this year.

FTAdviser recently reported that private equity firm AnaCap, which also owns the Novia platform, is among the potential buyers. 

Speaking at a virtual event hosted by consultancy firm the Lang Cat, Martin Jennings said: “We are probably a bit different to the other platforms in that we have a discretionary fund management business and a platform, we think we can scale those up to make them bigger, but we wouldn’t want to make it broader, as that would take away our Unique Selling Point (USP).

"Our view is that any new buyer of Parmenion, if they tried to split what we do now, would find that the separate bits are worth less than the combined operation. That’s why we don’t seek to compete with the really big platforms.” 

Jennings acknowledged there is a risk that smaller platforms get “muscled out” by the giants of the sector, but said fees are not the only consideration for advisers, with levels of service also important. 

“If fees were the number one thing, I would say, we wouldn’t have got any new assets in recent years. And Hargreaves Lansdown in the direct to consumer space, wouldn’t have had new assets in the recent years.

"But they are the biggest in their market, and we get inflows as well. We aim to answer all calls in 30 seconds, and also emails quickly.

"An adviser can go to a cheaper platform, but be on hold for an hour,  two hours, waiting for an answer to a simple query, or waiting days to get an answer to a basic email query, but we think service levels are important, and so there is a place for us in the market” 

Jennings said one of the challenges he faces at Parmenion is that at present many advisers only use the business for a “segment” of their client book, and many want Parmenion “to do more” so they can use it for services, but he has to figure out how to facilitate this without drifting too far away from the core offering he has now.

The range of discretionary managed funds operated by Parmenion are not presently available on any other platform, something which Jennings doesn’t expect to change.

He said: “The thing that would worry me about that is, if someone bought the Parmenion funds on another platform they use, but also had some with us on our platform, and if they come to us because they have an issue with the other platform, we might not be able to help.”

Ben Hammond, platforms director at consultancy firm Altus, said Parmenion tends to be used by advisers for clients that have a slightly bigger pot of assets.