View more on these topics

Adviser platforms lose almost £20m in one year

Money-Cash-Coins-GBP-Pounds-UK-700x450.jpgAdviser platforms suffered a combined pre-tax loss of £19m in the 2015 financial year, a report from consultancy group Finalitiq reveals.

The platforms made £7m profits in 2014, but increased competition saw margins in the sector hit and a £26m swing into the red.

Of 26 platforms covered in the report, 15 reported pre-tax profits at the end of last year.

However, only 11 had positive earnings and 15 have seen a cumulative loss of £735m in the profit and loss accounts.

The study suggests there is no direct correlation between profitability and assets under advice for most of the platforms.

Currently, the largest firms by assets are Cofunds, Fidelity, Old Mutual Wealth, AJ Bell and Standard Life Wrap. Of these, only AJ Bell ranks in the top five by pre-tax profit, along with Tansact, 7IM, James Hay and True Potential.

The report also estimates that replatforming works for Ascentric, Alliance Trust Savings, Aviva, Cofunds, FundsNetwork and the OMW platform will cost firms nearly £1bn and will see over £200bn in assets migrating.

Finalitiq founder Abraham Okusanya believes that “too many platforms hang in the balance”.

He says: “With most clients facing a 30 year plus retirement, advisers want to select platforms with the best possible chance of being around for the long haul, to deliver consistently superior service and never-ending investment in technology.

“Platforms are businesses and without profits, it’s hard to see how a business can continue to exist, compete and serve customers.”

Aspect8 financial adviser Claire Walsh says: “Platforms have huge initial investments before they’ve got enough assets to make profits so it is normal to have losses at the beginning.

“For example, this happened to Nucleus where they had five or six years losses before going to profits. Anyway, there are too many platforms out there so we’ll see consolidation picking up.”

M Thurlow & Co senior partner and adviser Blair Cann says that though platforms are an innovation for investment, he does not think it is necessary for an adviser to place assets on them.

He says: “We treat our clients in the old fashion way always. I can’t see ourselves changing on this.

“‘Platform’ means different things to different people. Some of our assets might fall on platforms like FundsNetwork, but we don’t take any positive steps to put our assets on platforms.”



More than £200bn ‘in flight’ on advised platforms

More than £200bn in advised platform assets are up for grabs due to acquisitions and replatforming, research suggests. A report by The Lang Cat says around £207bn in assets are “in flight” because of upheaval in the platform market. The report says: “This figure is a result of a combination of the takeovers currently being […]

10 key questions for your platform provider

Many firms have successfully implemented a platform solution into their business but the FCA’s thematic review paper issued at the start of this year provides more food for thought. As such, now is a good time for advisers to take a fresh look at their arrangements. Undertaking adequate due diligence and research is of most […]


Case study: administration — managing group life schemes

Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm