While the exact figure is debateable, most commentators would agree advisers now have a choice of around 30 platforms. Almost half of these are facing some form of disturbance, whether that be a major technology upgrade, a large-scale acquisition or the swirl of rumour over a sale or floatation.
Throw in shifts in the regulatory environment, new policy developments (such as the Lifetime Isa), changing social behaviours and the transformation of the pension landscape and it is clear the winds of change buffeting the platform industry have reached gale-force.
So what does this mean for advisers? The most obvious concern is that the platform decisions advisers made several years ago may no longer be the most suitable for them or their clients.
The relentless cycle of technology upgrades alone has left the early, pioneering players looking hand-cranked compared to their newer counterparts, while almost all are scrambling to catch-up with the functionality required to deliver the demand for income in retirement.
With the FCA continuing its focus on suitability, now is the time for advisers to reassess whether their original choices still stack up. But as they work through their due diligence check list, there is likely to be one crucial question they are missing off.
As a recent report by independent financial consultancy Altus warns: “It’s not enough to select a platform based purely on its performance today or on a slick presentation about the new functionality planned for tomorrow. Advisers need to ask how well the platform will be able to handle and deliver change in the future.”
Indeed, whether it is the complex challenge of merging two businesses or the upheaval involved in migrating from one platform to another, the sheer scale of change facing some providers is alarming.
In such a fast-moving market, their approach to change management will be a critical factor in determining not just their competitiveness but their long-term viability.
Question marks will appear over platforms that struggle to deliver big ticket change projects while keeping the day-to-day business going. For advisers, this could mean anything from the minor irritation of a dip in service levels to major disruption from a full-scale outage.
Distracted by change, some platforms will miss out on opportunities to innovate, leading them to fall further behind the pack. Others may fail to spot problems forming on the horizon.
All this can lead to uncertainty over the long-term commitment and future of an adviser’s platform of choice. So how can they judge change management expertise?
Future plans are a good place to start. Has the provider got a clear roadmap of future developments? Is there evidence of the provider actually bringing to life what they set out in their plan?
Having identified how change is planned, it is important to establish how it is actually delivered. Is there a dedicated change team or do projects fall to regular staff? Is there a documented change process? And how well is the change process governed? Are there steering groups and approval committees that fully understand the potential impact?
Finally, any major business change inevitably leads to IT change. How does the provider manage the roll out of new software updates across its systems? What measures are in place to protect clients against the failure of one of the multiple components? What plans do they have in place for disaster recovery and when were these last tested?
With platforms experiencing unprecedented levels of change and the market evolving quicker than ever advisers need to be confident their platform has the flexibility to adapt. If not, advisers could decide it is time for a change.
Alistair Wilson is head of retail platform strategy at Zurich UK Life