Warning bells have been sounded over the shifting of platform ownership, which commentators have claimed could be bad news for advisers.
Barry Neilson, chief customer officer at wrap-platform Nucleus, told FTAdviser the merger and acquisitions trend that had gripped the platform market over the past few years was turning more towards change of ownership than consolidation, particularly with asset managers buying platforms.
He said: “It’s going to be about fund managers trying to buy platforms, so it will be less about consolidation and more about change of ownership.
“There’s been a realisation that to take two platforms and merge them and try to drive synergies is really, really tricky. It’s very hard work.
“So I think we will see a change of ownership, with fund managers buying platforms, more than genuine consolidation.”
There have been some high-profile cases of botched replatformings and mergers causing havoc for advisers, with some unable to access their clients’ cash for days.
And asset managers owning platforms is a growing trend in the market. Aegon, Aviva, Fidelity and most recently M&G are just a few of the large fund houses with a platform in their arsenal.
M&G entered the platform space when it bought Ascentric from Royal London just last month.
Mr Neilson thought this was primarily because fund managers were becoming “dis-intermediated” by platforms.
He said: “Because [fund manager]’s clients are sitting on a platform, you have no idea who they are or what they are doing.
“But if they move into the platform space, the fund manager will have a much better idea of who their customer is.”
Mr Neilson added that asset managers were “notorious” in terms of managing to reach profitability and that they would look to “drive more profit” from the platforms if they were to own them.
“[Asset managers] would clearly try to force as much usage of their own funds as possible”, he said.
Mr Neilson said this could cause problems for the adviser-platform relationship in the future as advisers typically did not want “anybody thrusting products on them”.
He added: “Advisers want to feel as if they have all options for their client. At some point these things will clash in the middle and there will be conflict further down the line.”
imogen.tew@ft.com
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