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The Platforum: Strategic decisions and legacy platforms

Freddie Findlater

In the last instalment of my current examination into adviser platforms, we build on last week’s article into “legacy” platforms and those platforms that advisers are “warming to” or considering for adoption.

I noted with interest one of the comments left by an adviser on the article, who mentioned moving away from “legacy” platform relationships to another “preferred” platform provider.

Data from Matrix Solutions shows that on average, those adviser firms which make use of platforms have an average of three platform relationships.

Perhaps unsurprisingly, given they have the largest number of adviser users, at least one of those three platforms has been either Cofunds, FundsNetwork or Skandia. 

In some instances, the use of three platforms has been for historical reasons and not always been a strategic decision.

Last week’s article brought to light that a small number of advisers will be able to name a platform they use, but that they no longer wish to place new business on.

With that in mind, we have also asked advisers if their “primary” platform (the platform that holds the majority of their client assets) is also their “preferred” platform of use (that is, the platform they would use above all others in an ideal world).

From research carried out in Q2 this year, we have found 77 per cent of “primary” platforms are also the advisers’ preferred choice. This figure has remained consistent with past surveys.

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The pie chart here shows:

Q. Is your “primary platform” your preferred platform of choice, ie, the platform you would want to use above all others in an ideal world?

What we have been able to determine from interviewing advisers for several years is that, broadly speaking, an adviser’s preferred platform (be it primary or secondary by usage) usually provides: appropriate costs, ease of use and efficiency.

Relatively few advisers think their platforms deliver on all three of these factors.

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Transact users, for example, often cite the “excellent service” they receive from the platfoorm, but will then pull them up on the cost of providing that service.

Some platforms will prioritise an effective and modern online solution for advisers and not invest as heavily in platform support staff.

When we talk to advisers about client segmentation and platform choice, they are much more objective in their approach – platform choice comes back to suitability for the client and (more often than not) total cost of delivering their service.

The Platforum is running its annual conference on 8 October – a great opportunity for advisers to hear from and meet the platforms. You can view the latest agenda and sign up for the event here: http://www.theplatforum.com/events-views

Freddie Findlater is head of adviser platforms at The Platforum

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Neil Liversidge managing director at West Riding Personal Financial Solutions: “When you look at price, Alliance Trust Savings is without a doubt the go-to platform for high- net-worth clients but its functionality is still a little clunky.”

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Aurora Financial Planning chartered financial planner Aj Somal: “The legacy platforms are playing catch-up a bit with some of the newer entrants but they have the budgets to do that so it will be interesting to see how attitudes evolve.” 

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