Navigant research shows around £600m has been spent to date in the UK on delivering platforms and much of the industry is still making a loss, requiring long timescales to deliver expected returns.
The consultancy firm says the industry can’t support a large number of platforms and should expect to see providers both exiting and consolidating in the future.
Navigant Financial Services Europe practice leader Andrew Stewart says: “Five years ago, forecasts suggested that the industry would be administering closer to £150bn of assets by now. It has taken time for the market to understand the role that platforms can play. Now that it does so, there is considerable potential to accelerate the growth of assets on platforms over the next five years.”
Stewart estimates that there is £350bn in pension assets that could be transferred into schemes offered by platforms and £200bn in investment bonds.
He says: “We estimate that the combination of ongoing success in attracting collectives plus greater penetration of pension and investment bond assets could help platforms grow to £300bn within the next five years.”