Platform focus: Will Parmenion’s bionic approach pay dividends?

Seath-Miranda

Bristol-based platform Parmenion characterises itself as a technology and investment solutions business. Indeed, the platform’s technology was a key driver behind its acquisition by Aberdeen Asset Management, which was completed in January. In this week’s profile, we assess the implications of that acquisition for Parmenion’s future strategy and its plans to stay true to late founder Richard Mein’s vision.

Parmenion’s assets under administration stood at just over £2bn as at 31 December 2015, making it one of the smaller platforms by AUA we track. With Aberdeen’s backing, it is focused on making the right investment to support growth. The challenge will be to achieve growth without losing focus on its core competencies but this is something it tells us it is determined to achieve.

We will not be seeing an Aberdeen Asset Management rebrand. Instead, the fund group will play a supporting role, providing its investment management capabilities to enable simple investment propositions. We feel Parmenion should play up the Aberdeen association, as it is a strong brand and should help to draw in new business.

The platform’s white-labelled robo-advice proposition Interact has great potential. Interact is firmly business-to-business-to-consumer and has been adopted by 60 advisers. With Aberdeen’s backing, Parmenion sees an enormous opportunity to help advisers offer clients greater choice in how they access advice and cater to victims of the advice gap.

Parmenion prefers the term “bionic” advice to “robo”. This gelling of “silicon” and “carbon”, where machines automate the factfind but the adviser ultimately dispenses advice, is an approach we believe is likely to win out.

The platform sees the parallel with the retail “bricks and clicks” approach where online-only pioneers such as Asos found their share prices tumbling in favour of retailers pursuing an omni-channel approach, where the customer chooses the channel – online, in-store or click and collect – but receives the same quality of experience across the board. Parmenion plans to power the
omni-channel adviser.

Meanwhile, the platform is well known for its discretionary fund management capability and offers over 80 model portfolio solutions. Its proposition is also priced very keenly. For adviser firms with scale which like pure passive strategies, the platform charge is 15 basis points, the discretionary management charge is 0bps and there are no trading fees.

Parmenion has also removed the dealing charges on its flagship Conviction Solution. It points out that, in drawdown, this means it can offer flexible options with only the platform charge to the client.

The platform is also investing in its Sipp capability, working on developing proprietary technology to support the expansion of the Sipp business. Assets under management in the Parmenion Sipp are now in excess of £400m. There are also plans to further develop the centralised investment proposition in the at-retirement space.

Parmenion’s challenge for the platform will be to build scale without compromising on the quality of its service. The Aberdeen acquisition not only brings additional investment management capability but additional resource, including a sizeable call centre and enhanced governance capability. This should help Parmenion to manage the shift it needs to make.

The vision of late founder Richard Mein is still at the heart of Parmenion’s strategy. Mein’s philosophy was the platform should do a couple of things exceptionally well. This means making sure technology and service is tiptop, underpinned by straightforward investment management.

Parmenion wants to provide advisers with technology that gives them the flexibility to take their business where they want to go. And with technology having the potential to transform financial advice this is important. Aberdeen, a business with a global vision, saw this opportunity when it snapped it up. We hope Parmenion realises its ambition to support advisers that choose to make the transition to “bionic” advice.

Miranda Seath is senior researcher at Platforum

Platforum wrap facts: Parmenion
Platforum wrap facts: Parmenion. Click to enlarge