For quite some time now I have been talking to advisers about the amount of confusion I hear from firms in tackling platform due diligence.
Fresh from the stage at our annual conference, FCA technical specialist Rory Percival again reiterated his four stage process guidance for advisers – “do the thinking, make sure it’s robust, write it down and check it works”.
“This is the clarity we have been crying out for,” I overheard one IFA mutter last Wednesday.
Do the thinking: Each firm has different platform needs for the business and their clients. Some firms tell me they really value face to face BDM support, others don’t want to be bothered by anyone from the platform unless something needs fixing. For some the measure is purely cost with no requirement for any tools or gizmos.
By doing the thinking, the business draws a list of its own key priorities. Identifying the “must haves” is stage one of your process of assessing platform providers. Once you have identified the must-have criteria it is likely the number of providers will be much shorter before applying stage two – digging a little deeper.
Making sure it’s robust. Most providers tell you their proposition is the best; providers’ glossy due diligence materials say what you would expect them to say. Stage two is all about lifting the bonnet, what are the actual charges going to look like for my client portfolios, does the rebalancing work/do I need rebalancing, what is the range of funds and tax wrappers available and does this map to my client proposition?
Platform pricing is a minefield especially with some unbundling their charges and a move to clean share classes. Download our latest Guide to Platform Pricing – it’s independent and available free of charge to all advisers via our website.
But don’t just take our word for it. Advisers must be confident the funds, trading, tax wrappers and portfolio sizes being illustrated are representative of your own clients. It doesn’t hurt to ask the shortlisted providers to provide bespoke pricing illustrations to you for a “typical” client portfolio.
As I sign off with thoughts of due diligence in mind, I would like to draw attention to the northern leg of the everso popular Platforum adviser roadshows in November – Edinburgh on 20th and Manchester on 27th.
A half day packed with great speakers and includes Rory Percival, who will be taking open questions from the floor. The agenda is available on our website however places are limited so if you would like to reserve a space please contact myself email@example.com or firstname.lastname@example.org
Emma Napier is head of adviser relations at The Platforum