It is not too long ago that top line revenue turnover data dominated the headlines and the commentary surrounding them. This year it was striking to see the attention given to effective capital management, to operational efficiency and to margin management. On top of that, as one reads through the mid-year releases of firms one is seeing a commonality in the tenor of many statements with references made to e.g. the essential importance of a “low cost, sustainable savings platform”; “fee based flexible products” and “building valuable customer relationships with leading service and compelling propositions”
This isn’t to suggest these topics haven’t been on the minds of business owners across our industry for some time. One can refer back to Callum McCarthy’s call to arms in September 2006 and indeed the input of industry observers before and since that noteworthy event. However, if there is a silver lining arising from the economic challenges of the last 12 months I would suggest it is the accelerant it has provided to change agenda in our industry – not the talking about change agenda but the making it happen agenda.
For those firms with continued ambition in the long terms savings and asset accumulation and a desire to support advisers active in that essential market, the importance of platform capability was also very pronounced in mid year statements. Platforms are already a feature of many businesses and it would appear, from comments made, will become a feature of more firms. Whilst there are a number of ownership models operating in the UK there appears increasing convergence around the benefits which can accrue from a successful platform operation and how those benefits will materialise for both owners and users.
Evolutionary change implies in many minds a very long timeline. In the context of our current industry challenges, which are well documented, those who argue for evolutionary change worry me a little. I think that our need to respond positively to consumer needs requires a degree more urgency than may have been typical in our past and, if I may mix metaphors, perhaps we are now seeing “the tankers turning” rather more speedily than some might have expected.
As a current or potential platform user that should be seen positively, as further re-affirmation of the “tipping point” for platforms but also poses a question. Those topics highlighted in provider interims – improved capital management, increased operational efficiency and better margin management are front of mind for owners of all advisory businesses. Which of the platform providers appear best equipped to sustain those aspirations in the years ahead? I would suggest those with the flexibility afforded by having the tax wrappers and other capabilities on platform rather than a continuing link to legacy world product provision; those designed for web enabled straight through processing as a first principle and those who have been unambiguously established as service businesses, with the capacity to flex their offering to needs of their business partners are the ones best equipped to meet that challenge.