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Platform reviews: devil’s in the detail

Dear PAT, how detailed does a platform review need to be and should I be using additional and alternative platform providers?

Most IFAs have experience of using platforms in their businesses and, where this experience has been a painless one, have seen the benefits platform technology can bring. If we look at a typical client journey, most advisers tell me the platform really makes a difference at the latter stages – implementation and review.

Almost all adviser firms I speak to are happy with the nuts and bolts of the platforms they are using (the technology bit which makes it so efficient – the execution if you like). It is the little things – the service, the website or those annoying integrations – that do not work, which are just as important in providing good outcomes for clients.

Part of any good due diligence is revisiting what the “must-haves” were when you started your platform journey and making sure these still represent the firms’ key platform objectives now. Actually asking a few clients what they value from you is a pretty good measure of their satisfaction. Including a few client testimonials, if nothing else, massages the ego and gives confidence and reassurance both internally and externally.

Ask yourself: “Can I be 100 per cent confident I know what my clients value?” It may be an eye opener but a slight adjustment to a service proposition bolsters a future of happy clients. Going back to platform use – does my current platform support the service my clients desire or are there other providers who might better tick those boxes?

The question of how often to conduct a review is a lot harder to answer. One IFA told me last week they have been “using Platform A for five years now and should really start thinking about looking at others. Another was very proud of the fact that his firm “does an annual review of the platform every year without fail as it is what the FSA wants”.

The answer is – there is no right or wrong or prescribed set of rules. It is just good old common sense I am afraid. If I were to stick my neck out and be bold, I would say adviser firms should conduct platform due diligence at least every 18 months. Sometimes things change: funds get added, functionality increases, price structures alter and every now and then service and support gets worse not better.

In my view the review itself should look at the following factors:

  • The market – who are the players, any exits/new entrants?

  • Pricing – what is the impact of price for my clients i.e. typical client portfolio(s)

  • Functionality – what do I need the platform to do to support my service?

  • Service – what has the service been like, could it be better, am I still confident on delivery?

  • Experience – how confident am I that the platform will deliver in the future i.e. RDR readiness?

  • Client expectation – what do my clients need?

I am not suggesting sending 25 platform providers lengthy questionnaires – that is not going to solve anything apart from possibly increasing costs for the providers in completing them. Familiarise yourself with who the players are, their proposition and the clients they are targeting/suitable for (some providers are bold enough to say “we suit your C clients”). Create a shortlist of suitable providers and do some deeper analysis. I would be very wary of using stand-alone comparison websites where a computer tells you the answer once you have input a million other answers – and certainly do not ask the platforms for a template which you might top and tail (this happens folks – I heard it with my own ears!)

What I am saying is, platform due diligence is important and increasingly so with the RDR looming, but spending weeks and weeks with your head in your hands is worthless and usually achieves nothing. Give me a call – I have done lots of independent analysis on each of the providers and I have all the gumph for each of them which I share with IFAs who register at The Platforum www.theplatforum.com.

Let me know if you have any pressing concerns for next month’s issue. Email me at pat@theplatforum.com.

PAT is Platforum’s platform analysis tool. ‘Dear PAT’ will share advisers’ most pressing concerns with platforms.

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