Four platforms ready to set up in IFA market
Four new platforms are planning to launch to the IFA market over the next 12 months, according to Platforum.
The platforms include established firms in the UK market that are yet to have a presence in the wrap sector and less well known companies.
It is understood that the new entrants will be concentrating on the IFA market rather than corporate wraps, with the first launch not expected until the end of the year.
Platforum managing director Holly Mackay says: “People have started to talk about which platforms are going to fail and which ones might go under but people have not really been talking that much about new entrants. I think it is worth bearing in mind this is not the end of it.”
Mackay says more stringent capital adequacy rules for platforms will not put off new entrants but may affect the type of platforms coming to market.
She says: “Back in the earlier days, groups might have looked at the platform area and not fully appreciated the complexities of running a platform.
“There are now more prescriptive requirements coming out about how platforms should be run, operated and regulated but I do not think that will act as a deterrent to new entrants.”
But Mackay adds that regulation and the associated costs of launching and running a platform may mean the majority of new platforms will be bigger players rather than smaller independent models.
As at March 31 2010 the value of the platform market stood at £101.59bn. Platforum has calculated that four platforms currently account for 85 per cent of the total IFA platform market - Cofunds, Fidelity, Skandia and Transact.
Finance & Technology Research Centre director Ian McKenna is encouraged that small platforms such as Nucleus are making inroads in the platform market but adds that that bigger groups will probably come to dominate the platform market.
He says: “A small start-up might struggle in the future.”