Is UI where the next quantum leap will be made? Which component of UI is most important to advisers and consumers?
Adviser service survey feedback
Platforms are now embedded within the day-to-day processes of many advisory businesses. This means what was ground breaking functionality is the new normal.
A recent Defaqto survey confirmed the following:
- The percentage of advisers putting all of their business on a platform has increased to 15 per cent of our surveyed population. The increase year-on-year is nearly 50 per cent.
- Yet nearly 17 per cent of respondents confirmed that they had changed their preferred platform in the last 12 months.
- Overall satisfaction levels fell by 6 per cent from last year to this year.
Robos will not replace platforms
The current barrier to entry for digital guidance is low.
Version one for robo advisers has positioned existing tools and technology on a digital interface. The technology is accessible and the journey is replicable.
We have identified eight D2C platforms that have developed or enhanced their services to offer integrated workflows to direct consumers. These include Hargreaves Lansdown, Standard Life Savings and Fidelity Personal Investing.
Banks providing services include Barclays, Nationwide and Natwest.
This demonstrates their ability to protect their existing client base from trends within this space.
Specialist robo advisers are notable by their absence from the FCA Sandbox cohorts. These journeys are not using artificial intelligence. Nor does it seem they are likely to in the near future.
Are digital wealth mangers seeking to replicate the advice process or replace the financial adviser?
Space for robo advisers and platforms
Specialist start-ups demonstrated they can succeed as stand-alone businesses if they obtain the right partners and achieve sufficient scale. There are live examples of this in the market now.
It is important to note that both are moving towards the distribution middle ground by offering clients either a guided digital journey or human advice.
Please note we have classified advice as financial planning advice rather than investment advice.
Established incumbents confirmed they can and will make acquisitions where the business model supports their value chain and/or enhances their technology infrastructure.
Scale can present a different type of challenge
The past six months has provided ample evidence of the ability of large institutions to influence and disrupt distribution.
There is possibly some irony in this observation as incumbents depart from established distribution channels.
Vanguard entered the platform market in June 2017, offering low-cost Vanguard funds with a single, capped charge.
The platform attracted more than £500m in its first three months.
This demonstrates that players with scale possess the ability to enter the crowded D2C platform market successfully.
