Investments  

Is it time for advisers to depart platforms?

  • Learn about the replatforming problems firms have been facing
  • Gain an understanding of the forthcoming regulatory changes
  • Learn about how the platform market has been performing
CPD
Approx.30min

“Honestly, I would like to get rid of all of them, and operate from my back-office system, Intelligent Office, where I would have access to vanilla products,” says Susan Hill, chartered financial planner at Susan Hill FP.

“I would be charged for the products and trading facility which would be part of my annual fee. [There would be] two fees – the adviser fee, which includes the product, and a fund fee; clear, simple, transparent – as much as funds can be.”

Ms Hill concedes, however, there are a few obstacles to making this a reality. She says Intelligent Office does not offer a basic self-invested personal plan, individual savings account or general investment account, plus there is the issue of how to co-ordinate third-party offerings.

But she points to recent enhancements made by Intelligent Office provider Intelliflo – itself owned by Invesco – as a potential sign of things to come. In June, Intelliflo announced a new service making it easier for intermediaries to run model portfolios on an advisory basis.

“The only issue with that is you can [currently] only attach Invesco funds and model portfolio services,” she says.

Although cutting out platforms is far from a new argument, being able to offer such services in-house could provide the antidote for advisers perpetually frustrated by platform technology glitches, and for those who do not see value in the bells and whistles added in recent years.

But putting in place such processes is fraught with a number of potential hurdles. Some have suggested scale is a crucial factor here, with only the largest companies having the necessary resource to make it happen. This is also likely to be the case when it comes to another familiar issue – cost – with bigger companies more adept at absorbing higher expenses.

Going elsewhere

Although the spiralling bills incurred by platforms has been eye-opening, it is the consequences suffered by clients and the impact on companies’ reputations that has caused the most damage.

In March, Money Management’s sister title, FTAdviser, reported that the Financial Ombudsman Service had received 169 investment-related complaints about Cofunds in the second half of last year – the second highest after Barclays – with almost two-thirds of these being upheld. These included customers unable to draw income from their portfolios and long waiting times on the phone.

The ombudsman also received a large number of grievances from Aviva customers. However, of the 144 submitted, only 25 per cent were upheld.

Aegon said in response at the time that core operational service had “returned to target levels” by the end of 2018, and that it was “clear” on what functionality had to be prioritised in the months ahead. Aviva said its complaint numbers were below industry averages, with the rise partly due to Friends Life figures being included in its own numbers for the first time.

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. January 2017, Mike Barrett said there was not one recorded instance of replatforming or tech migration going.........?

  2. Ms Hill lists three products that Intelligent Office does not offer. Which of these is not one of them?

  3. According to Adrian Grace, what would be the optimal platform market size?

  4. How does Mr Catt describe the FCA's platform market proposals?

  5. Mr Walker had how many replatforming cases resulting in material losses for clients?

  6. Which platform technology company is described as having a busy year?

Nearly There…

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

You should now know…

  • Learn about the replatforming problems firms have been facing
  • Gain an understanding of the forthcoming regulatory changes
  • Learn about how the platform market has been performing

I completed this CPD in

To bank your CPD please complete the form below.

Were the stated learning objectives met?

Why weren't they met?

What did you learn from undertaking this CPD exercise?

Why did you undertake this piece of learning?

Banked!

Congratulations, you have successfully completed and banked this piece of CPD

Already Banked!

You have already banked for this article.

To bank your CPD you must or

Register

One or more questions have been incorrectly answered,
 please review your answers and try again.

Please complete all the above text fields to bank your CPD.

More Investments CPDSee my completed CPDSee all CPD