Platform bosses are rich for a reason.
In a matter of years, they have completely transformed the way financial advisers do business.
The scale of the efficiency gains have been staggering and, in the eyes of advocates, platforms have been one of the innovations that has done the most to improve the financial lives of clients as well as advisers.
But did any of those platform bosses really forsee how quickly the retirement landscape would change? People are living longer, and living healthier for longer. They are enjoying phased retirement, and using a wider range of assets like housing wealth to fund ambitious goals in later life. They have multiple jobs with multiple pensions to go with them, and are keeping a closer eye on how to meet soaring care costs.
Post-pension freedoms, clients have moved away from reliance on defined benefit schemes and the state pension to taking control over the way they wind their pots down – often with the help of their trusted financial adviser.
If any platform executive predicted any of this – and the level of service advisers would need from their platform to manage clients’ demands – then it appears they have been slow to react.
Time and again, Money Marketing hears from advisers frustrated that, while their platform is great for clients in accumulation, the same can’t be said of its decumulation offering.
A nice little storm of factors are bringing this issue into stark relief. The final report from the FCA’s platform competition study is just weeks away. Is there an argument that, as well as making it too difficult to transfer to another provider, platforms are making it too taxing to take money off their own propositions in the form of income or lump sum payments?
That might show an undue level of cynicism, but the fact remains that a quarter of advisers say their favourite platform is different in accumulation and decumulation.
Getting pre-funding of withdrawals right, integrating cashflow modelling and tax calculators, having all wrappers in one place and not charging punitive ad hoc fees for post-retirement services aren’t just “nice to haves”; they are absolutely integral for a financial planner to do their job properly and ensure their client gets the retirement they deserve.
It’s incumbent on advisers to keep the pressure up too. In the context of the FCA’s new product governance rules, mandating that products and services are shown to be right for their target market, financial planners have an increasing burden to show that their platform wasn’t just the right fit while you were saving, but is suited to you as a decumulation client too.
It’s now over to the platforms to step up to the plate.