In a joint paper entitled, Wrap Trends 2009 And Beyond, Dunstan Thomas chairman Chris Read and independent platform consultant Stanley Kirk say spending big amounts of money on entering the platform market is unjustified, suggesting instead a shared distribution model.
Kirk says: “If development budgets are smaller, so too are the level of assets that any new entrant would need to achieve profitability. If you assume that a well established individual adviser today will have assets under influence of about £20m, a platform therefore only needs to attract 50 such adviser firms to achieve assets under influ- ence of £1bn. Our estimates are that a platform built using the shared development model with assets under influence of over £1bn will break even and be in profit.”
Read says platform providers with real focus on their users and on independence-led service provision should be able to reach this target quite quickly.
He says: “They can reach this target, especially if they are proactive in providing support for identifying legacy assets from the client banks of their users.”