Market divide in platform space is making it easier for IFAs, says Nucleus CEO
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Nucleus chief executive David Ferguson says the growing divide among platform providers is making it easier for IFAs to choose a suitable wrap proposition.
Ferguson says he is seeing clear signs of separation in the platform space as a result of legacy providers looking for a route to sustained profitability, therefore allowing advisers to make a more informed decision on a suitable platform model.
He says: “While there has always been a real and considerable difference between true wrap platforms and what are essentially fund supermarkets this has not always been clear to advisers and the wider market. The current climate combined with what the industry knows is coming in the form of RDR, is forcing many platform to show their true colours.
“On one side there are the legacy providers seeking to act as a distribution channel for funds and on the other the more modern fully open architecture providers seeking to provide an administration service to the client and the adviser, paid for by the client.”
Ferguson says both approaches have their place in the market but advisers need to understand the fundamental differences between the two propositions.
He adds: “The former’s interests are not necessarily aligned with them or their clients. The very public negotiations taking place between two of the largest platforms and the fund management industry is highlighting these differences and giving advisers the sort of insight they need when asking themselves which model is best for them and their clients.”
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