Investments  

Should you white label a platform?

  • Describe the advantages of white labelling a platform
  • Explain how white labelling works
  • Identify any drawback from white labelling
CPD
Approx.30min

Democratising the platform market

Though the sector has lagged behind, APIs and cloud-based systems have started to gain ground and positively change the adviser platform market – replacing legacy technology with automated systems that can cut through the clunk with seamless, entirely paper-free processing.

It promises to dramatically reduce manual intervention, powering significant efficiency gains that can flow throughout the sector. (To put it in perspective, the cash operations team at Seccl, the API-first custodian, can manage around 30x the number of client payments per year than the industry average.)

This new level of automation can bring clear benefits to the adviser and their client. For one, it promises to create a platform service that is better, faster and likely cheaper, thanks to the ease of integration and the streamlining of once inefficient processes. What is more, it provides advisers with new and unrivalled access to every single piece of data and change event, at a client level: a new world of reporting possibility, with complete ownership of how and when data is used.

But there is another, less immediately obvious impact, too. For those willing to take the leap and assert greater influence on the platform experience, the opportunity has never been greater – thanks to a new, cutting-edge and low-cost infrastructure of custody, client money, wrapper administration and trading services.

The quest for control in the platform space

Through an online survey of advisers, the technology consultancy NextWealth recently found that nearly half (47 per cent) of firms with over £250m of assets under advice were planning on launching a platform of their own within the next three years – while 8 per cent had already begun to do so. 

It is an interesting statistic, for two reasons. First it shows that a highly significant minority of the market are looking to influence a part of the value chain that has typically fallen outside of the adviser’s reach (or concern). 

And second, it demonstrates that this is a ‘mainstream’ trend that extends beyond the very largest of firms or national networks, which manage several billions in client assets. Thanks to emerging technology, even smaller firms have been able to get a piece of the platform action – taking on some of the responsibilities themselves in return for the additional control that it brings.

But before going any further, what exactly do we mean by ‘launching a platform’? Let’s start by unpacking the various options in this space.

‘White labelling’ a platform

Just like ‘launching a platform’, the term ‘white label’ is often used without definition to refer to one or other of a variety of quite different approaches. 

Sometimes, it is used solely in relation to branding, to mean the act of distributing an existing platform offering under your own brand identity (and, strictly speaking, this is the only proper definition). This is an option that many traditional platforms offer, and often for free.