Corporate platform numbers could triple in six months - The Platforum
The number of employees on active corporate wraps or platforms should increase by a factor of two or three in the next six months, according to The Platforum’s Corporate Platform Guide.
The guide says there are currently 62 corporate customers with live employee platforms, representing 240,000 employees. The Platforum estimates average sign-up rates of between 20 and 30 per cent of total employees. But non-pension assets on these platforms stand at less than £100m, less than 0.02 per cent of DC pension assets, meaning the business case for providers or asset managers contemplating launching such a platform will require a leap of faith about the likely evolution of this market, says The Platforum.
The research also shows that since 2010, 8 per cent of joiners to the Hargreaves Lansdown corporate platform have taken out an Isa in addition to their pension.
The report highlights the way the individual IFA sector has taken six to seven years to reach profitability where proprietary technology has been built, and say there are many that will never become profitable.
It says the corporate platform market has even bigger hurdles to jump than providers in the individual sector if it is to create truly useful employee solutions such as integration with payroll, flexible benefits and investment products, as well as the provision of a core pension product.
Holly MacKay, managing director of The Platforum says: “We define a corporate platform as an online service for employees which brings together a minimum of a pension, a corporate Isa and financial education tools. As the market develops and integration improves, today’s corporate platforms will expand and could include flexible benefits at one end and investment platforms at the other – these three building blocks in aggregate will create the ultimate ‘employee platform’. No one platform yet offers the full package but the potential is there.”
The publication is available free of charge at http://theplatforum.com/corporate.