True Potential senior partner on building a platform from scratch and stripping out complexities
At the heart of True Potential’s philosophy is a desire to simplify the business of advice.
I meet Daniel Harrison, one of True Potential’s five senior partners, the day news the firm is ending its partnership with SEI to build its own platform hits the headlines.
Building a platform from scratch is far from simple; a point reinforced by the team’s complex project plan. Indeed, getting their heads around processes that appear relatively simple, such as paying in a cheque, requires 19 different component steps.
It begs the question: if simplicity is an obsession, what is driving the firm to build proprietary technology?
“Our philosophy is: how do we make it simple? How can we strip out processes?” says Harrison.
To do this, True Potential has decided to take back control.
For Harrison, this philosophy started when he joined Positive Solutions in 1999. Then, the firm’s ambition was to create “electronic” advisers.
His team developed the first electronic fact-find. This was in the days when the support team spent a lot of their time helping advisers to work out how to type in their own passwords.
The birth pangs of electronic advice were painful. Positive Solutions had 1,800 appointed representatives and they had to be dragged kicking and screaming onto the technology.
Harrison calls himself a Xennial: born in 1981, his generation is sandwiched between Generation X and millennials. Technology was not a formative part of his early years, although he remembers his father buying their first word processor from IBM. But as a teenager he got into coding and, like so many other tech enthusiasts, loved playing and building computer games.
This generation has an interesting perspective: they embrace technology but they also remember a time before it took hold of everything we do. Straddling these two worlds has arguably helped Harrison and the team to think about making technology work for advisers, paraplanners and administrators, rather than expecting them to just grasp how to do it.
One of the major challenges facing platforms and back office providers is that, no matter how great a difference their technology could make to the productivity, scalability and profitability of advice firms, often the opportunity is only as strong as its weakest link.
A business owner can evangelise about their latest bit of kit, but if a practice manager does not know how to use it, it will make very little difference.
True Potential’s answer is an intensive five-day training course for its wealth managers, for which it picks up the cost.
Harrison tells me he is not looking at what other platforms do.
“We look at what the consumer does. We are behind other industries because there is a lot of legacy technology and administration, and we have outsourced the big technology builds.
“We start with the end customer and what they expect from a platform, then we look at what makes it easier for a financial adviser to advise.”
The firm’s annual report makes much of its adoption of blockchain. So, how does this make things better for the consumer? As one platform boss previously pointed out, a distributed ledger cannot work if only one party is using blockchain.
Harrison takes the example of platform payments. “Currently there is a third-party payment agent and a third-party transfer agent. When you buy something using a debit, Worldpay will ping the bank, then the request goes to the platform and then to the fund buying agent, where you can buy a certain number of units.
“The client has to wait for the validation to come back. But if you use blockchain it fires up and down the chain instantly. This is the way all systems should have been built.”
This should significantly shorten transfer times but it requires each link in the chain to adopt the approach.
As Harrison says: “We have built the first train station platform and now we are waiting.”
True Potential will also use blockchain as an audit tool to validate client transactions. It is trialling this through its segregated mandate with Smith & Williamson. The blockchain cannot be changed or hidden, thereby making it more accurate.
The firm is sweating details like this to strip back unnecessary complexity for advisers, removing processes as they become redundant.
But we should not lose sight of the consumer benefit. By driving up productivity, the cost of administration will fall and this should ultimately bring down the cost of advice.
2007-present: Senior partner, True Potential
1999-2007: Various roles, Positive Solutions
Miranda Seath is research director at Platforum