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Platform switches at three-year high

Advisers are switching their favoured platform at the highest rate in three years, according to research by Defaqto.

In 2018, 25 per cent of advisers said they had changed their preferred platform in the last 12 months.

This is up from 16 per cent answering positively to the same question in 2017 and 10 per cent the year before that.

The financial research company published the findings as part of its annual review of platform services as rated by advisers.

2018 was a turbulent time for the platform market with a number of the largest players such as Aviva and Aegon going through challenging replatforming projects to upgrade their technology.

Aviva was the most used platform in 2017, with around 43 per cent of advisers saying they had used it in the past 12 months. But the company lost this position to Old Mutual Wealth in 2018, which Defaqto says advisers reported using most in the year.

Another change in 2018 was an increase in the number of advisers putting 100 per cent of new business on platform.

This increased from 11 per cent in 2016, to 16 per cent in 2017, rising again again to 18 per cent last year. Defaqto observes this upward trend may be linked to an increase in the number of advisers offering advice which is restricted to investments and pensions.

The proportion of advisers putting 75 to 99 per cent of new business on platform has reduced 18 per cent over the last three years, with 51 per cent of advisers falling into this category in 2018.

Defaqto’s research found a continuing decline in adviser satisfaction levels with platform service. Adviser satisfaction with platforms decreased or stayed the same in 10 out of 11 areas of service with the average score down from 81 per cent in 2016 to 72 per cent in 2018.

Defaqto head of insight and consulting for wealth and protection, David Cartwright, says: “The platform community has faced significant challenges throughout 2018 such as regulatory adherence, the influence of technology and market disruptors challenging cost competitiveness.

“Despite continued mergers and acquisitions, re-platforming exercises and increasing levels of functionality, the survey results indicate that a number of platforms still fall short when it comes to the levels of service advisers expect.

“With a fall in satisfaction from advisers, it’s important for providers to take note and ensure they are responding accordingly.”

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