In the battle for market share, platforms not only need to convince advisers to use them in the first place, but also ensure they are happy to remain as customers.
Figures from the Platforum show the continued growth of assets under administration. Healthy growth in the third quarter of 2012 pushed total AUA to £205bn, with advised assets still accounting for the lion’s share.
While directly invested business and workplace savings should start to increase their overall market share, advised sales will continue to account for the biggest portion of assets held on platforms, and the Platforum predicts that advised assets will reach £300bn by the end of 2014 if the current rate of growth continues.
The data from the Investment Trends research supports this prediction and shows that although the percentage of new business that was placed through platforms fell in 2012 compared to 2011, this is expected to increase from 69 per cent last year to 74 per cent in 2013 and peak at 81 per cent in 2014 before falling back slightly.
Set against this expected increase in assets being invested through platforms, the number of advisers who are moving or considering changing their platforms has remained fairly constant. According to this year’s research, 20 per cent of advisers stopped placing business on a platform in 2012, compared with 21 per cent in 2011.
The number of advisers actively looking to replace a platform in 2013 is also around a fifth. The figure for 2012 shows that 16 per cent of advisers are looking at adding a platform to their business, while 3 per cent intend to replace a platform they currently use.
These figures are down slightly on the intentions that were stated in 2011, when 26 per cent of advisers intended to add a new platform and 6 per cent intended to replace a platform. But as 24 per cent say they have no plans to change their platforms but would do so if they found a better one, there is a lot to play for.
The four most popular platforms for advisers who are considering a move remain the same as last year: Elevate is top choice, followed by Transact, Nucleus and Standard Life.
Moving to a new platform previously involved an incredibly time-consuming process. However, with a new system of re-registration coming into effect this year and the regulator insisting there should be no restrictions on re-registration after 2013, the number of advisers who change their platforms is likely to increase.
Cost is cited as the biggest driver for advisers looking at changing their platforms. Lower administration fees was cited by 36 per cent of advisers as a reason for changing platforms, compared with only 26 per cent saying better features would tempt them away. However, costs comes eight on the list of areas that advisers would like to see improved.
The most requested improvements are those that make the system easier to use, with better adviser service and support and a better website or interface in the top five for most requested improvements. Better reporting, faster processing and better integration with back office systems and other adviser software all make the top 10 of advisers’ requested improvements.
However, with the level of charges set to be one of the industry’s hot topics for 2013, the balance between costs and service levels could shift.