Advisers shift business onto platforms in digital push

Advisers shift business onto platforms in digital push

Financial advisers are conducting more business through platforms as the sector is shifting to digital-first advice models, research shows. 

According to the CoreData Research platform study, nearly half of advisers (44 per cent) are set to increase business on their main platform over the next 12 months, up from 35 per cent last year.

The study, which surveyed 661 respondents in June, found advisers are also using platforms more frequently. 

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Over seven in 10 (71 per cent) now use platforms daily, an increase from 68 per cent last year.

This was particularly true for clients with up to £100k in net assets, where daily platform usage was reported by 73 per cent of advisers versus 63 per cent in 2020.

Andrew Inwood, founder and principal of CoreData, said: “The pandemic-fuelled shift to digital-first business models has enabled platforms to further embed themselves into advice practices.

“This is underscored by stronger expected platform flows, higher usage figures and an increased appetite to use multiple providers.” 

The research found advisers increasingly adopt a multiple platform strategy. 

Nearly one-third (31 per cent) now use three platforms, up from 27 per cent last year, while a higher portion use seven or more providers (5 per cent), versus 2 per cent last year.

Furthermore, around 15 per cent of advisers plan to add at least one additional platform over the next year, compared with 13 per cent last year.

Tom Kean, director at Thameside Financial Planning, said he was surprised not all advisers were using platforms daily.

He said: “The statistics surprise me slightly. Many years ago, when platforms were first becoming mainstream tools for IFAs and DIY providers alike, Thameside decided to build its business proposition around their use.

“It is a decision that we have come to celebrate. There is literally no downside to using them, and I am surprised that the numbers are not 100 per cent.”

Similarly Tim Morris, IFA at Russell & Co Financial Advisers, said: “Platforms have been the default option since I moved to IFA eight years ago so I’ve always used them on a daily basis. They are (mostly) convenient for me and the client. That is key to providing good service.”

He said he uses more than three platforms for two reasons: “Firstly because of different price points offering better value for different portfolio values.

“Secondly, if I take on a new client who wants to remain on a particular platform I will accommodate that where appropriate."

He added: "Ideally, I would like all clients on one platform yet appreciate that may not be appropriate for all clients.

"For example, if a client wants a more extensive range of investment options they may be willing to pay more for a platform offering the full fund universe."

But Kean said he was unconvinced about having more than one platform: "The economies of scale and increased skills developed by using just one outweigh any disadvantage or risk in my view.”