Advisers need to re-think their relationship with their platform, according to a new report by the Lang Cat.
The Edinburgh-based consultancy firm has published a report into how platforms can meet the needs of large or fast-growing advice firms.
Its latest report, called Level Up: Business Growth, Platforms and You, has advocated a new relationship where advisers work with platform providers to use their tools in a unique way.
It would see advice firms become much more demanding of their platforms, rather than just accepting what the platform provider has to offer, leading to every adviser receiving a unique service which they could then pass on to clients.
Mark Polson, founder of the Lang Cat and author of the report, said: “Adviser firms themselves have a very strong sense of what they want to deliver.
“The bigger they get, the more bespoke their requirements are.
“The change in the landscape we are talking about is significant, but for high-growth or larger firms who want to look at something genuinely different, we think moving beyond the vanilla retail platform market will give businesses a great chance for real differentiation and – hopefully – a secure and predictable future.
“This is also a seismic shift for providers to adjust to, and we think it is those who have models allowing adviser firms to approach and interact with the platform space in different ways who have the edge.”
Mr Polson said this model would work best for advice firms with more than £500m in assets under administration, but he suggested those with less could find ways of making it work.
He said: “Why shouldn’t eight like-minded firms with £150m under management each who share a common view of the world have a common architecture?
“I don’t think anyone is doing it at the moment but it would be interesting.”
Mr Polson estimated that a small proportion of the platform market operated on this basis already – at most £75bn of assets from the whole market of up to £400bn.
The Lang Cat’s report was commissioned by platform provider SEI.
Kevin Russell, proposition director at SEI, said he did not believe the Lang Cat’s report meant platforms would have to start building bespoke offerings for each large advice firm.
He said: “We allow advice firms to do all the stuff that happens under the hood when you press the accelerator.
“We can put all of these things on the table and can build it if you want. It is that which makes this model doable.”
He cited the example of True Potential which uses SEI’s systems to power its technology.
damian.fantato@ft.com
