Axa Elevate says it is on track to achieve profitability within the next 18 months.
Speaking to Money Marketing, Elevate managing director David Thompson says the business is beating its financial projections.
He says: “We have strong plans and are ahead of our budgets to get to profitability within 18 months. Forecast flows for platforms in the UK overall are very positive so it is an attractive market to be in.”
There has been a number of changes to platform pricing over recent weeks, including Cofunds removing their annual flat-rate charge, Standard Life launching a new tiered pricing structure, and Ascentric considering a move to fixed costs.
But Thompson has warned a race to the bottom on platform charges could hit the sustainability of platforms’ business models.
He says: “We have to make sure we put pricing at a level where we in the platform market can remain sustainable as businesses. There can also be a cost to reducing price in that it can possibly mean there is less focus on service and advisers are telling us they want good service at a reasonable price.”
Thompson says that in addition to its recent move to reduce charges for bulk trades, Elevate has a long-term investment plan, with details of future investment announced early next year, including plans to improve back office integration.
In June Axa’s parent company announced a pre-tax loss of £30m, which included £12.7m of investment in the platform business. The parent company, Axa Portfolio Services, is made up of Elevate, Axa’s direct-to-consumer platform Axa Self Investor, and also runs Axa’s pension schemes and Isas.