For platforms, fund managers, advisers, banks and insurers, size has always seemingly mattered – and in our industry size has been measured by assets. The more assets you have, apparently, the better. There has been a lot of recent discussion about how platforms disclose their assets.
The challenge for asset disclosure is platforms come in all shapes and sizes – some focus on advisers; some on execution only, some look at the institutional market and others on the workplace. In some cases, platforms do all four. Some platforms collaborate with one and other – and so there is a risk of a double count. The question has always been how do you disclose the true position?
Fidelity is a multi-channel business and does disclose its asset split by channel and product – of our £44bn or so of assets this splits between £36bn from intermediaries and £8bn directly*. There isn’t a legacy book to talk of – it all sits on a single platform. We also have a large number of customers who use multiple parts of our business – they may have a company pension on our platform – but also use an adviser. From this perspective it is important we join up all elements of our platform. Other platforms have similar approaches.
About 10 years ago, when platforms started to disclose assets we agreed on a common approach for how we should do this. I think in more recent times, especially with newer entrants, we have seemingly lost this principle. We would like to see a return of this common approach and would like to see standard disclosure.
In order to do this I think there are some simple principles that I think should apply. Firstly, only include assets that sit on the platform. This seems obvious, but you would be surprised by how many platforms include assets that sit off its platform. Secondly, be clear on the breakdown of assets – splitting out assets by product and by customer type. We would like to see this consistently applied across all platforms. Lastly, there should be a mechanism for platforms to disclose the totality of its assets. This last point is important as it does show the total scale of the service.
Disclosing assets is important – it’s a mechanism to show levels of usage and growth. However, assets are an outcome and what will drive platforms forward is great customer experience, service and satisfaction. We need to ensure that in the size debate we forget about the fundamentals. Clearly it’s not about how big it is it’s what you do with it.
Ed Dymott is head of business development at Fidelity Worldwide Investment