PlatformJul 26 2017

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
  • Gain an understanding of the current market
  • Learn about the challenges faced by providers
  • Grasp how regulatory changes could reshape the industry
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Approx.30min
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Shaking up the competition: Wraps & platforms survey

AJ Bell’s marketing director, Billy Mackay, explains: “Providers, investment firms and advisory firms [are] looking to break into the different parts of the value chain as an alternative to simply growing their existing business models.”

Rather than the combination of existing players, it is the arrival of new competitors that has attracted attention this year. Vanguard’s venture in the UK market has caused a stir, even though its offering is purely D2C.  

Annual costs of just 0.15 per cent, in addition to ongoing fund charges capped at £375 per annum, “will pile further pressure on the old-school asset managers,” according to Mr Neilson.

“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.”

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. 

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