Making the move
However, as we have seen with large-scale platform projects, consolidations are not without other risks to clients, such as late payments.
Mr Young suggests advisers need to take the business decisions of platforms very seriously when doing due diligence, and should not shy away from moving clients where it is suitable.
“There can be basic but huge problems – money not being paid, data going missing, and any changes in service, ownership, functionality and, potentially, pricing mean advisers do need to think about the implications for their own research and due diligence," he confirms.
“I have a real concern that despite the glaring errors made this year, too few advisers will change platform and move existing clients due to the inconsistencies and administration experienced around transferring from one platform to another."
If investors are “trapped” on a platform it does little to dissuade platforms from future errors, and could even embolden them to increase prices or at least keep them static, Mr Young argues.
He believes this would be akin to “lifeco lethargy” of years past.
This is precisely the dilemma experienced by Lee Coates, director of Ethical Investors, who has been struggling with the new Aegon platform and says his preference was to move his Cofunds clients off the new platform they have been migrated to.
“The job of moving over 1,000 clients [to a different platform] is just a nightmare and we cannot selectively say we will be nice to the rich clients and leave the poor clients with crappy admin. It is all out or all stay,” he says.
Questions to ask
So how do advisers approach platform due diligence in light of these risks of consolidation or complete collapse?
Duff and Phelps says, at the platform due diligence stage there is plenty advisers can ask about that will stand them in good stead.
“There is definitely a point around ensuring that due diligence on the service level agreements that are in place, that there is diversification of risk.
"When you outsource a key process, then understanding the risks and management of risks and the status and standing of the entity you are dealing with, is of fundamental importance,” said Mr Turner.
Chris Holmes, director of London-based Almus Wealth, keeps a very keen eye on the platforms he chooses to use at his firm.
The managing director says he looks at the relationship between the custodian and the platform.
Helen Howcroft is managing director of London-based Equanimity IFA, and agrees with Mr Holmes that you need to dig into the financial strength of a platform as well as where assets are held.