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.
Of the seven platforms that can cater for non-advised business, only 7IM, Alliance Trust Savings and Hargreaves have disclosed the percentage splits, which are 10 per cent, 45 per cent and 91 per cent, respectively.
Understanding the needs of customers is key to a platform’s success, but it’s clear from platforms’ varying approaches that there is room for a number of different interpretations.
Mr Vasilieff says: “With advisers having differing business models, which are supported by a wide variety of technology and software solutions, the platform needs to ensure it offers a blend of user experience, [and] enriched functionality to enable the right outcomes to be achieved for the end client, as well as the ability to interface with other software solutions.”
He adds that many platforms fall down by focusing on new clients instead of existing ones.
As mentioned, costs are increasingly coming into focus across the investment chain. The FCA’s asset management market study suggested that the status quo cannot continue on fund charges, and its platform study could yet say the same for that industry.
The data in Table 3 highlights the potential challenges faced by consumers when comparing costs. The likes of initial fees, annual charges and fund switching charges vary considerably between providers.
Clients of some firms, such as AJ Bell, can potentially pay all three, but it is dependent on a number of factors. For example, setting up a Sipp incurs a £120 initial charge, but this cost is zero for an Isa. Also, in terms of fund switching, dealing online costs £3.95, whereas telephone transactions increase the fee to £29.95.
Compared to the 2016 survey, charges have seen little in the way of change, with providers trusting current structures. However, the outcome of the regulator’s study could shape things differently in years to come.
