After a promising 2006 where usage of and asset movement onto intermediary platforms has shown respectable growth, 2007 holds much promise for both providers and advisers operating in this space. Adnitor estimates that a further £35bn of assets will move to intermediary platforms over the next 12 months.
In terms of new entrants the market also looks forward to the prospect of several strong propositions arriving, including Friends Provident, Axa and a revamped Skandia and Selestia combined offering all looking to deliver in 2007.
Research suggests that over the coming year the typical adviser will continue to take steps towards transforming their business model. This will be achieved through efficiencies realised through consolidation, platform ‘tools’ and client segmentation. In addition, where appropriate, the movement towards a fee based model will also continue.
Adviser’s views and needs were, in the early stages of market development, somewhat overlooked in favour of core transactional and wrapper capabilities. However, platform development is now taking shape with the advisers’ actual business objectives in mind. To secure success platforms will need to continue to strive to understand the demands of the adviser business, to deliver a solution that facilitates not only their immediate requirements but enables their growth and development.
For an adviser to transform, they must have a consolidated, scaleable technology based solution at the heart of their business model. For a platform to efficiently administer the volume of assets required to be profitable, they must be receiving a high percentage of business electronically to realise the efficiencies of straight through processing.
In order that both the platform and adviser business models can operate profitably, the technology solution needs to ensure that there is a good connection between the businesses and the overall user experience is slick, efficient and connected.
Assessing today’s platform front-end or web offerings we need to reflect on the events that have influenced their development to date.
Over recent years platforms, specifically the traditional view of wrap style platforms, have been positioned by many as the ‘total solution’, to provide a single facility for an adviser’s needs. The adviser’s expectation are generally that the platform will need to be as functionally rich as their own back office solution.
In turn this has seen platforms develop a staggering array of tools, ranging from the standard management information reports, to note pad asset valuations, CGT calculators, with profits analysis, what if scenario planning tools and so on. And this is set to expand yet further over the next year.
But as the market continues to mature this view is starting to be replaced with an alternative. Recent market research suggests advisers are now utilising a number of platforms to provide a solution for differing client needs and this is mirrored by more mature markets – such as that witnessed in Australia where on average two to three platforms are used. But this issue may be clouded in the UK by the uncertainty towards whole of market advice from a regulatory aspect, and by some advisers concerns of being trapped without the ability to easily exit from a platform.
Are platforms right in trying to accommodate every kind of financial planning tool? In recognition of multiple platform usage and in response to adviser demands, platforms are now starting to focus on the integration of their solution with that of the tool suites available within adviser back office systems. At present the flow of information is only in one direction – from platform to adviser back office. However, strides are being made to build two way links that enable the push and pull of client data between solutions. In time this will provide the adviser with the greatest possible efficiencies and maximise the elusive STP model.
The platform providers’ focus on a more user orientated proposition, is reflective of a market that is now starting to enter a phase of rationalisation. Although 2007 looks promising, there will continue to be issues that require resolution, as well as the changing shifts in market focus and direction. Whilst the range of functionality and services is set to continue to grow, platforms will be faced with the additional challenge of how to present this informatively to the user.
As on-line tools deliver ‘value added’ services to the advisers, the increasing functionality will need to be integrated, to avoid any repetition of work.
On-line help will become critical so that users are not dependant on call centres. In addition flexibility and configuration to meet the adviser’s own service model will become increasingly important. This flexibility will focus on remunerations options, the supply of management information as well as white labelled solutions.
As the platforms continue to rise to the challenge, and jostle for position it is important to acknowledge that within the mêlée of offerings there are many success stories. Market responses in 2006 indicate that platforms are beginning to meet the requirements of the advice market.
In order to recognised these successes and to provide advisers with an opportunity to have their say, Adnitor has added a category to the Platform Awards Dinner which reflects advisers views on intermediary platforms.
The ‘Usability, design and experience’ award is designed to recognise platforms with the best front-end offerings focussing on excellence in the field of web design, usability and online user experience.
In selecting an offering advisers should give consideration to practice management & financial planning tools, online help, self servicing functionality, innovation, single keying, connectivity for placing transactions and flexibility.
Adnitor invites advisers to vote for their platform offering of choice. To register your vote you will need to visit www.whichplatform.com. Voting closes on Friday 9, February.
The Adnitor Platform Awards Dinner is taking place at London’s Café Royal on the 28th February 2007. For more details visit www.adnitor.com
Eric Welsby is a consultant at Adnitor Ltd