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New platforms will be “killed” in current market, warns Cofunds chief

New entrants to the platform sector are “going to get killed” in the current market, Cofunds chief executive Charlie Eppinger has warned.

Eppinger warns that platforms without the funding to continue to invest in technology will struggle in the current declining stock market.

Cofunds says it has taken around £2bn in net assets onto the platform in the year to date bringing total assets to £15bn. It claims there are only three other platforms that have accumulated this amount in their whole period of existence.

Eppinger says: “I can’t tell you how ugly it is out there. The markets are lousy right now.”

“Who could start a platform now? You need critical mass.We are not immune, but all the people that don’t have a lot of assets or market share are in trouble because where is the money going to come from to invest in technology and systems?”

He adds: “These are scale businesses, so we have a good base on which to build. If you are a new entrant and you don’t have a lot of assets you are going to get killed in this market because your expenses are not going to go away.”

Eppinger has also revealed that 65 people contacted the recruitment firm Cofunds employed to fill its chief executive role, which Skandia’s Brett Williams is set to take up later this year.

He says that 25 were interviewed for the post, but one of the key reasons for appointing Williams was the fact he had launched Selestia from scratch.

Eppinger says: “Williams can speak for himself but reading between the lines, when he was working for Old Mutual and Selestia it was a certain type of company. When it acquired an insurance company it changed the culture of the company.”

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