Shaking up the competition: Wraps & platforms survey

  • Gain an understanding of the current market
  • Learn about the challenges faced by providers
  • Grasp how regulatory changes could reshape the industry

“Those managers who are desperate to hold on to their historical margins, but are struggling to deliver consistent alpha could all suffer.”

However, he adds that the lack of a Sipp wrapper, plus the fact the platform has no means to offer advice, means it is unlikely to cause great disturbance to advisers, and explains: “Top-quality advisory firms may see slight disruption, but not wholesale, as the value of personalised advice is already recognised and appreciated by clients.”

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Mr Mackay agrees that failing to offer a Sipp is significant factor, and says: “The advised and non-advised platforms have differing client needs, and so far we have seen little impact in clients moving away from our advised platform to D2C propositions.”

With all these issues in mind, Money Management’s annual platform survey shines a spotlight on the current state of play and seeks to ask how firms are positioned to cope with the market’s evolution. 

What’s on offer?

Table 1 gives an overall picture of platform size and the type of clients catered for. In terms of trends, the sharp uptick on assets under management (AUM) in comparison to 2016’s survey is difficult to ignore. 

The number and size of the respondents can potentially skew these figures, but as the big players have all been included this year and last year, the leap to £485bn from 2016’s restated figure of £417bn looks encouraging. 

Strong stockmarket performance over the past 12 months has clearly benefitted platforms as well as advisers and consumers.

On an individual level, Cofunds remains the largest platform with just shy of £87bn AUM, closely followed by Fidelity’s FundsNetwork, which administers more than £75bn.

FundsNetwork leads the way in terms of the number of clients, with a figure in excess of 1 million. 

There are mixed fortunes for the firms in second and third place. Although the exact figures are not available, Cofunds now declares approximately 750,000 clients this time, versus an estimated 800,000 in 2016. 

Hargreaves Lansdown’s numbers have continued to increase sharply, rising from 813,000 to 876,000 – a leap of almost 8 per cent.

On initial inspection, the average client fund size appears to have dropped slightly over the course of the year. But this is likely due the absence of Wealthtime and Praemium, as both firms tend to look after clients with large pots. 

On the whole, providers have seen a rise in average fund size, which again can largely be attributed to market performance.

Adviser importance 

All platforms, other than Hargreaves’ Vantage, offer services to advisers. Table 2 shows the access options for each provider, as well as the percentage of advised business.

Although some choose not to enable D2C investing, such as AJ Bell, Nucleus and Transact, customers are offered access to their portfolios either directly or on a viewing-only basis.