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The Platforum: Novia shows platforms are not just a ‘big company’ game

Launched in 2008, Novia has led the charge on clean share class conversion with many of its peers still continuing to pay rebates

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Novia was launched towards the end of 2008 as an independent wrap offering access to a wide range of investments and discretionary managers.

Assets under administration were  £2.49bn as at 31 March – a 9.65 per cent increase on the previous quarter. The business has been profitable since  2011 and has a B AKG rating for financial strength, with sizeable private equity backing. A significant coup for the group was supporting the launch of the Aegon platform back in 2011. 

A new firm, Novia Investment Services Ltd, was set up to handle build and administration services for Aegon. 

For market observers such as ourselves, the relationship appeared to be beneficial to both parties: For Aegon, outsourcing the technology allowed them to bring the platform to market quickly while they could focus on proposition and strategy. 

For Novia, a new income stream laid to rest accusations from some doubters that running a successful platform is a “big company” game. Aegon subsequently acquired NISL in 2013.   

With Novia continuing to hold fifth place in The Platforum’s User Leaderboard this quarter, advisers are largely positively about the platform. Its biggest strength is functionality, where it ranks second in our Market Monitor (a sliver) behind Transact due to offering a wide range of investment options – a feature that users also note and value.

The reporting functionality on this platform is also held in relatively high regard but the fact that Report Zone is separate to the main site for placing business causes some frustration. The importance of end-to-end seamlessness – as far as this is feasible – is something we increasingly hear about from advisers.

Novia boldly led the charge on the issue of share class conversion, having already completed its bulk conversion programme. Standard Life and Alliance Trust Savings have also decided on this route while their peers currently continue to support rebate-paying funds.

Another recent development for Novia was the launch of Copia Capital Management, a discretionary fund manager accessible to users alongside other discretionary managers on the platform. 

Copia offers risk-rated model portfolios built using passives (OEICs and ETFs). With accelerated uptake of models and passives – particularly ETFs – anticipated, this move seems in-step with market demand.

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Our Take on Price (http://www.theplatforum.com/pricing )

GIA, ISA and SIPP

Annual admin fee

Tiered: 0.50%-0.15%

Set-up fee

None

Interest on cash

0.2% under BoE base rate

Transaction fees

Funds: £0    Equities: proportionate share of dealing charge

Transfer in/out charges

None

Novia tends to come out on the pricey side when looking at simple comparisons. The platform becomes more competitive when dealing with more esoteric investments, integrating with discretionary managers and administering model portfolios.

Holly Mackay is managing director at The Platforum

Adviser views

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Mackenzie Taylor Wealth Management director Ken Taylor

The functionality on Novia is very good and is consistently evolving. Recently I was getting MI for the Gabriel reporting and that was very efficient and saved me a lot of time. The quality of their staff is very good. There will be problems with any platform but when there is someone always takes ownership of it. We have done price comparisons recently with other platforms and they are very competitive. 

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Sorry – still don’t get the “competitive price” view. I have just literally put £15.000 ISA money into Bankers Trust Investment trust with ATS. Charge £12.50 The £75 pa platform fee remains as before. So why would I want to pay 0.5% – 0.15% pa of funds held

  2. My question would be, why not? £15000 @ 0.5% = £75 so no worse off. Not sure of the charge on the IT or number of fund alternatives available or switching costs or flexibility of ATS but then again when I do my platform DD, whilst aparently low cost there are other factors why ATS doesn’t feature for my clients. But it is horses for courses. No one platform will suit everyone, whether adviser or client or regulator.

  3. Kevin – Sorry not to be clear. The £15,000 was just this year’s ISA. it was added to an existing portfolio of £300,000. I agree that for portfolios of less than £30,000 others may be less expensive. But for larger portfolios I still wonder why so many investors pay such large variable platform charges or why their advisers see 0.5% pa as anthing other than expensive.

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