Adviser platforms as we know them may not exist in the future, but will instead be replaced by technology that provides individual services, a report has said.
The days of a large, “monolithic” solution may be coming to an end, said Altus Consulting in a white paper published today (May 24).
“There is an argument that the world is shifting from a product-centric society to a service-centric one; where organisations become ‘value facilitators’ rather than ‘value producers’ in that they will not only supply the product but also facilitate and offer value in its use,” the report said.
For platforms, this could means what Altus called a “microservice-based architecture”, meaning that they would turn into smaller components providing individual services.
This would bring benefits such as resilience, flexibility, and scalability, however it would means more complexity in terms of planning and managing these components.
“A platform, as we currently understand it, may disappear and instead become the digital framework and infrastructure that brings multiple parties together, working to offer connected services and value exchange – the vehicle by which customers are connected to advisers, tax wrappers, and investment solutions,” the report said.
Research by FE Fundinfo shows that 90 per cent of advisers think integrations were important to the planning process, and Altus’s own research showed advisers have three clear priorities, the ability to have their own client communications, easy and quick access to up to date valuations and transactions data, and minimising the “rekeying” between the adviser’s back office and the platform.
This will present a stepchange for the platform industry, away from the current focus on covering “all the bases”, Altus said.
In order to succeed in this new dynamic, advice tech firms need a clear vision of business purpose, and knowing how you will support your customers, it added.
However, delivering innovation and disrupting the industry is tricky amid the heavy regulation of the industry.
“Radical innovation will either require, or trigger, some sort of regulatory reform; the current rules around platform service providers evolved from the fund supermarket definition, which was created in 2005,” the report said.
Ultimately, the level of service provided by the platform will be the determining factor in its success.
“With the consolidation of technology providers, and the vast similarities of each platform’s product offering, proposition and cost models, service models have really shown themselves to be the only true differentiator.”
sally.hickey@ft.com
