Platforms 

Why platforms are at the heart of advisers' access to products

  • Understand the headwinds platforms face and how they are used by advisers.
  • Learn whether there is space for both platforms and robo advisers, and the impact of PSD2.
  • Grasp how platforms will navigate the current regulatory environment.
CPD
Approx.30min
Why platforms are at the heart of advisers' access to products

Platforms are most certainly alive. They have transformed the investment landscape in the past 15 years.

They have simplified administration and increased investment choice.

It could be argued they were the catalyst for the low-cost investing options now available. There is much to be celebrated.

Yet their continued dominance is the subject of considerable debate.

It could be contested some are evolving their services more dynamically than others. Perhaps it is more reasonable to contend that many are presently shackled by the burden of regulation and the expectation of continued development. 

Is the second Payment Services Directive (PSD2) the catalyst for change? Will it replace or embrace the role of platforms in people’s financial and non-financial lives?

Is the current version of robo-advice a Trojan horse in the digital war?

Will the behavioural focus change from the act of investing to the activity of money?

2018 is a watershed year and not just for platforms.

There are a number of potential headwinds: regulatory adherence and intervention, re-platforming challenges, the continued growth of low-cost products, and adviser demand for continued service enhancements.  

A number of platforms have been able to use these headwinds to strategically position themselves for the expected disruption in the advised and direct to consumer (D2C) spaces.

Robo advisers have become the media solution for the advice gap and nominated as a challenger to financial advisers in the longer-term. This coverage is helpful for the digital wealth management industry. 

But is version one of robo advice actually a Trojan horse in the real battle to be fought? Will platforms continue to be the star around which advice and asset management revolve?

Or will Open Banking challenge this current alignment? 

Not sure? Let's re-cap on the key trends in 2017 and what has happened in 2018 so far.

Platform headwinds

The result of regulatory adherence and impending intervention means many provider product roadmaps are defined.

Room for technology enhancements could be limited. Mifid II, GDPR and the forthcoming platform market study are major resource burdens.

For some, consolidation and re-platforming are adding to this workload. The workload is not evenly spread – the technology space is dominated by a small number of players. 

The reality is platform functionality has plateaued after 15 years of rapid growth.

The functionality for on-boarding, model portfolio services and taking income is established and effective.

Low-cost investing is a popular alternative to traditional investment methods. 

The user interface (UI) has become increasingly important. User experience and satisfaction is a key differentiator between the growing number of platforms.

Is UI where the next quantum leap will be made? Which component of UI is most important to advisers and consumers?

Comments

CPD
Approx.30min
  1. Mr Jack points out a number of headwinds faced by platforms, but which one of these is not a headwind?

  2. The author says platform functionality has plateaued after how many years of rapid growth?

  3. According to a Defaqto survey, what had happened to overall satisfaction levels with platforms among respondents from last year to this year?

  4. Movements in the advised market indicate opportunities exist for what type of entrants?

  5. Is this statement from Mr Jack true or false: The regulatory opportunities also appear to be playing to the strengths of the large institutions?

  6. Which piece of regulation "poses a different challenge" to platforms, according to Mr Jack?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Understand the headwinds platforms face and how they are used by advisers.
  • Learn whether there is space for both platforms and robo advisers, and the impact of PSD2.
  • Grasp how platforms will navigate the current regulatory environment.

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