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Advisers will overcome platform market struggles, Nucleus says

Advisers will continue to thrive in a difficult market environment despite the problems facing the platform industry, Nucleus says.

Speaking to Money Marketing, Nucleus chief customer officer Barry Neilson says platforms will come under increasing pressure in the short-term with advisers demanding more agile technology to cope with growing customer numbers.

Platforms that can harness technology most efficiently around advisers’ personalised needs will be most successful this year, he adds.

This follows a difficult 2018 for the platform industry characterised by a string of largely unsuccessful technology upgrades.

Neilson says: “Economic advantages for platforms are strong but diversifying and personalising can be difficult – platforms are used to serving a large customer base that traditionally had the same needs.

“Innovation is especially needed against a persistent backdrop of regulatory change because platform technology, like any technology, can quickly get old and sluggish.”

The lead up to the FCA’s update on the platform market study this year will likely also place pressure on platforms.

Platforms criticised for launching before they are ready

Neilson says: “It’s a very tricky year coming up, especially as we have had strong years for the industry recently. Advisers don’t need to win clients, the demand for advice is strong and there are always new business opportunities so many are likely working at capacity.”

Although there is benefit in collaboration in the platform space, platforms would do best to focus on internal operations this year and focus on securing positive net flows and strengthening business, Neilson adds.

“A lot of platforms cannot have been happy with how things went last year. Platforms haven’t seen strong growth and need to be focused on themselves in this difficult short-term. The future for platforms is very strong, but the emphasis right now should not be on watching how other platforms are doing things.”

Neilson says Nucleus will boost its technology development staff headcount this year to better service its 91,000 clients.

The newly-listed platform currently has around 80 staff working in technology development in addition to its personalised team at Bravura Solutions which provides direct access to its Sonata operating system.

Neilson says: “We are now trying to personalise that for advisers, so there’ll be no focus on growing other parts of the business this year. Platforms are now part of the wider supply chain of advisers and we need to follow that path and just hone in on building technologies.”

2018 in Review: Platforms take on the pressure

Continued consolidation across the advice industry may be a sore point for some advisers, but platforms are unlikely to feel that pinch.

Neilson says the average firm served by Nucleus has 4.5 advisers.

“The rate of consolidation is high but it’s not something we hold concerns about. People are getting used to change and volatility and advisers will increasingly need to service to that this year. Better technology from platforms will help them cut through the background noise to ultimately deliver a value for money service to clients.”



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There is one comment at the moment, we would love to hear your opinion too.

  1. Any platform that wants to do well just needs to fathom out an easy way to bulk transfer clients from Aegon/Cofunds.

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