How has the use of platforms changed?

"We are seeing more firms looking for a white label platform solutions which can reduce charges to consumers and provide some additional margin to the adviser. It is important both these elements are present, the client must benefit as well as the adviser," McKenna says.

"Essentially what we are seeing is more advisers questioning if traditional platforms are overpriced and if they can find better solutions for their customers. The entry level at which this is practical for the adviser is reducing considerably. In the past firms needed circa £1bn plus to do an own label platform deal, now the entry point can be far lower."

Centralised investment propositions and model portfolio services continue to be the preferred investment outcome for most companies, and the list of third-party discretionary managers on platforms continues to grow. 

McKenna says he has witnessed the growing demand for straight-through applications and integrations. 

He adds: “There is significant growth in client portals, which for many is now the beginning of the client journey. As platform pricing and service propositions become increasingly similar, for example more platforms providing tools to analyse assets and portfolios in detail, together with a wide range of DFM options, the things that are significant differentiators are changing.

"Seamless interaction with the technology advisers use to run their business, such as their cash flow planning, and practice management and portfolio construction tools are becoming increasingly important. Such integrations need to be two way wherever possible to reduce manual data entry for the adviser. You don’t want a highly qualified adviser or paraplanner doing manual data entry: it is not economic and leads to errors.”

Client engagement

When it comes to access for clients, platforms have offered some degree of online access for many years, but in some cases it has been very limited. 

Additionally, such services only present full information on the assets on-platform with, at best, very limited information on off-platform assets. 

It is typically far better for a client to be able to visit an adviser's client portal, which can provide a comprehensive summary of all their investments to give a holistic financial position.

According to McKenna, a small number of platforms do offer some "exceptional" digital functionality. For example, he says 7IM's 7IMagine app offers a user interface that "delivers arguably the best financial planning user experience ever". 

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He adds that Praemium’s portal includes an artificial intelligence capability that can identify when there is a higher risk of a client leaving an adviser, but such exceptions are few and far between.