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Plunging prices as providers feel pressure

Platforms are increasingly being forced to drop their charges to “suicidal prices” because of the similarity of their propositions, according to Transact.

Speaking at the Tax Incentivised Savings Association’s wraps and platforms seminar in London last week, Transact marketing director Ian Taylor said most platforms are powered by the same four firms – SEI, GBST, Bravura and FNZ.

He said, as a result, platforms are being drawn into greater competition to reduce their prices but warned that the downward pressure on charges is unsustainable.

He said: “The major technology firms in the UK do not want to produce 40 or 50 different variations of their technology, they want to support as few as they possibly can.

“Because of the similarity between platforms in terms of technology, platform providers are being pushed to offer suicidal prices. Platform charges are becoming too low and, in order to make a profit, most will have to increase their prices.”

Investment Quorum chief executive Lee Robertson says: “The further the platform market develops, the more pressure providers come under to reduce their costs.

“It is very difficult for platforms to differentiate themselves from the rest of the market.”

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