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Leader: The market evolves

The latest Investment Trends report into wraps and platforms offers a real insight into the continued evolution of the market.

That the market continues to grow, both in terms of the number of platform providers and the assets that are now advised and managed through these platforms, is no surprise.

The fact that the market is still dominated by the three traditional giants of the industry, both in terms of assets and the number of advisers using them, should also not be very surprising.

However, the lead these businesses built up by being first into the market continues to erode and the service and range of functions offered by some of the newer entrants ensures an interesting year ahead as providers continue to jostle for position and market share. Will it be price, range of products and tools or ease of use that determines the most successful platforms?

The breadth of the Investment Trends research, which covers more than 1,200 advisers, offers an accurate reflection of which platforms are being used, how they are being used and what advisers like and do not like about the technology they employ. It also offers an insight into changes in the way that advisers use that technology.

In fact, 13 years after the launch of the first platform featured in the survey and with more than £200bn of assets now under administration, there is still a sense of uncertainty for the platform market.

The RDR has forced financial advisers to take a long look at their businesses and review how their business models work and how they want them to work in future. This includes how and why wraps and platforms feature in their businesses and advisers’ views on whether price is more important than service.

The next 12 months will see a number of significant changes in addition to those forced on the business by the RDR.

The FSA-imposed deadline to find a solution to re-registration has prompted the industry to back the Tax Incentivised Savings Association solution TeX. As that takes effect this year, it will be fascinating to see how much or how little movement takes place between platforms.

As advisers are able to vote with their feet it will be interesting to see how platforms respond.

Ignoring the effects of re-registration, it is widely expected that platform pricing will come under significant pressure in 2013 as advisers scrutinise, and have to justify, the full cost of investing for their clients.

Over the next 12 months it will be fascinating to watch this evolution and see where the market goes from here.


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