View more on these topics

Ian McKenna: Platforms are missing a trick on data integration

Platforms are shooting themselves in the foot by not streamlining their systems with those of advisers

Advisers have never had a better range of technology options to help them automate their firms. Software now exists to support just about every part of the advice process.

There is increasing evidence that those who use more technology throughout their business are able to support more clients, have more assets under advice, are more profitable and, not surprisingly, are actually happier.

Such systems liberate advisers to do more of what they prefer doing: spending time with clients. They also provide the necessary administrative support to meet ever rising regulatory standards.

With this in mind, it is crucial for platforms, life offices and asset managers to understand how the technology they use helps advisers run their businesses smarter.

Fact-find tools that harvest client information from expert sources, automated needs analysis and goal planners, and risk profiling, asset allocation, portfolio construction and rebalancing tools are leading to a world where advisers have the tools to streamline all aspects of the advice process.

Importantly, more and more of these systems are being integrated to minimise the need for manual rekeying.

This is critical, as repeated manual data entry can lead to human error. For the most part, this has been an area of major progress in the last couple of years. However, the main area where things have not improved as much is integrations between platforms and adviser technology.

The current level of data being exchanged is only just scratching the surface of what could be achieved.

Ever since platforms first emerged in the UK at the end of the last century there has been debate over whether advisers could rely upon them for all their technology infrastructure, thus removing the need for a separate client or practice management system.

Personally, I have never thought an independent firm could run all of their record keeping and administration on technology supplied by a platform.

If an advice firm accepts technology that delivers a substantial operational benefit they do not actually pay for, there must be the potential for a conflict with FCA inducements rules. If this issue can be overcome, there is still the fact very few platforms provide any significant capability for advisers to report held away assets , that is, those the client has invested in but that are not on the subject platform or even under the adviser’s control.

Equally, if the adviser transacts any business other than on that platform they will need external IT capacity to streamline their regulatory reporting.

Perhaps 20 years ago, when both sectors were in their infancy, platforms and adviser software suppliers were effectively competing but each have long since demonstrated their value, so it is time for greater collaboration.

Platforms that can deliver the most streamlined integration with advisers’ software will maximise the benefits to everyone.

Why do platforms not make every element of client data they hold readily available to advisers’ systems? Our recent research suggests only two platforms make transaction history – so crucial for advisers to access for capital gains tax calculations – easily available via third-party systems.

And why have we not reached the stage where an adviser can execute transactions on a platform from within their own core systems? This would bring huge benefits to all.

In a world where APIs are increasingly being used to enable advisers to move easily from one package to another with access to all the data they need, there is a great opportunity for platforms to embrace the same level of data sharing.

As firms step up their use of technology to improve their efficiency, reduce costs and enhance customer service, it is essential for asset managers, platforms and life offices to do everything necessary to streamline their systems with those of advisers.

Such organisations have a great deal to gain themselves in improving communications with advisers and reducing their own costs. Let’s make detailed integration a priority between all business partners.

Ian McKenna is director of the Finance & Technology Research Centre



Prudential goes after 30 more advisers

Prudential is resuming its adviser recruitment drive with plans to hire up to thirty new advisers by the end of the year. Advice arm Prudential Financial Planning began in 2012 with 20 advisers. By 2015 it had 210 advisers, and the firm announced it was targeting a further 40 with a hiring campaign. Currently, Prudential […]


Neil Woodford: I’m right to be criticised for underperformance

Neil Woodford says criticism levelled against him for his funds’ underperformance over the summer is deserved, but says he is confident in the positioning of the portfolio in the face of a “dangerous” market consensus on China. Woodford Equity Income was the second worst-performing fund in August, down 4 per cent, after a series of negative […]

Pension savings-2015

Pension tax relief: parked (for the moment)

The national news agenda has been dominated by pension issues this month. For those that missed it (and there cannot have been many given that this was the lead story in spoken and written media), the Chancellor announced a decision to make no decision on pension tax relief in his 16 March 2016 Budget speech. To […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Does sound rather splendid. Reality is though likes of Intelligent Office and Nucleus (over 3 years on since we asked) still have no live fund value data feed – was an API issue but then an issue of time, money, resources and will.
    In an ideal world at the advice end we would key once and that would feed through to fact find/risk/cash flow tool/wrap/applications/ML/compliance/suitability etc. but we are still some way away. There are strides being made in this area but not (from what I have seen) from the stand-alone wrap companies. Maybe being at the sharp end (day to day usability and functionality) gets in the way of the grandstanding over ‘inflows’, awards and ‘AUM’?

Leave a comment