A failure in large providers’ business models has sparked recent platform acquisitions, according to Novia chief executive Bill Vasilieff.
Vasilieff says deals such as Aegon’s acquisition of Cofunds and Standard Life’s purchase of Axa do not reflect a consolidation trend but unrealistic expectations at large firms.
He says: “This year has been quite difficult for some platforms and the news around two of the big ones – Cofunds and Axa – has been significant. But I don’t think there is a consolidation trend. I think what’s happened is that some of the big players had very high expectations on profits and they have failed. Now they are exiting the market. Also, some people don’t see platforms as businesses in their own right; they just see them as a way of getting funds.”
Many legacy life companies have pulled out of the market as platforms have evolved, with around 70 folding since the birth of platforms, according to Vasilieff.
He says: “Only a few are left and some have adopted some platform businesses.
“So I don’t think the platform space is overcrowded as many say. It is a big market, probably the fourth biggest in the world for investments.”
Novia had assets under administration of £4.1bn as at Q2 of 2016.
For Money Marketing’s full interview with Bill Vasilieff, see pages 22 and 23 of this week’s magazine and our profile online this Friday