Amidst the feverish speculation over platform deals and market consolidation engulfing our industry in recent weeks, Seven Investment Management continues to plough its own furrow. 7IM does not go in for industry navel gazing: the charismatic management team of Justin Urquhart Stewart, Tom Sheridan and, on the platform side, Verona Smith is more focused on its own adviser users and what they want.
The platform is one element of the 7IM proposition, which includes a discretionary fund manager and a range of multi-manager funds. 7IM’s reputation for discretionary fund management is attracting assets from a growing number of advisers with wealthy clients and has translated into some healthy inflows from re-registrations.
The 7IM platform recently joined the over-£10bn club (with assets under administration of £10.2bn at Q1) and also has the largest average portfolio size of those we track. Caledonia Investments, the global investment trust that bought a majority stake in the business in June 2015, should be pleased with its investment.
Despite the platform’s recent success in attracting re-registrations, quarterly growth is just 1 per cent. However, while low, this is in line with muted growth across adviser platforms this quarter.
The dreadful performance of markets in January and February slammed the brakes on the growth enjoyed in Q4 2015. Thankfully, markets performed a lot better in March, saving 7IM and many of its peers from negative growth this quarter.
7IM has a high percentage of assets in DFM model portfolios and has opened up access to third party DFMs. Onboarding is driven by adviser demand. 7IM users are routinely complimentary in our surveys and it is consistently rated among the top three platforms on our user leaderboard.
Saying that, it does come in for some criticism for reports and its score for usefulness of online tools is fairly average. The business is taking steps to address this and has launched My Future: a gaming-style tool designed to help advisers show clients what income they can expect in retirement and when the money is going to run out. The app is available for clients to download directly, giving advisers another means of engaging with them.
Our reservation about My Future is that clients are presented with a stark picture of an impoverished retirement, which could make them feel hopeless. When we challenged Smith on this point, she argues that clients need to understand their pension pot “good, bad or ugly”.
The tool helps clients to identify they have a problem and it is up to their adviser to guide them on how to solve it. Feedback, she tells us, has been very positive.
Phil Bungey’s recent appointment as chief operating officer should provide a boost. Joining from Nutmeg, he brings valuable insight on digital operations. Using digital tools will improve automation and help advisers offer richer support to clients. And 7IM does not rule out developing the functionality to provide transactional services – for example, taking out an Isa – directly to clients on the platform in future. However, it would only switch this on if the advice firm wants it.
7IM is a shrewd business. Our research has found half of the 14.2 million investors in the UK say they are partly advised and partly self-directed. 7IM’s approach would allow advisers to give their clients the option to self-serve on simple transactions through the platform but offers the confidence it is not trying to eat their lunch.
Miranda Seath is senior researcher at Platforum