Here at Platforum, as we return our leopard print clothing to our wardrobes (apart from Peter Mann who failed miserably to embrace the theme – unless the rumours are true) and dust ourselves down after a frenetic but hugely enjoyable Platforum conference, we thought we would reflect on some of the main takeaways from Tuesday’s event.
Our theme was ‘Can the leopard change its spots’. As Carlton Hood observed in his fantastic keynote closing address, of course leopards can’t change their spots but they are very adaptable beasts. Indeed, all our speakers were clear that adaptability is a hugely important attribute.
One big announcement from the conference was that our headline sponsor Aegon is retiring the Cofunds brand. Cue a lot of nostalgia for one of the original platform big beasts. It’s a logical step as Aegon cements its own position as a scale platform player – but it is also a sad day. There was much talk of the Cofunds early days at the conference (we think Cofunds deserves a good send off and as so many leading lights of the platform sector started their careers there, it is sure to get one). There are clear parallels with Skandia’s re-invention to Old Mutual Wealth – brand is important but at the end of the day it’s about how well the platform works for advisers and their clients. The tech upgrade at Aegon should bring significant improvements.
There was a debate at the conference about the importance of scale – asset managers and platforms can use scale to bring charges down and there is clear regulatory scrutiny on value for fees. We know that value isn’t always about the cheapest price – but if scale does enable platforms to bring charges down for clients, then they should do so. We argue that it is not just about scale – scalability and adaptability are just as important.
Interestingly, Mary Starks Director of Competition at the FCA – who received widespread praise from attendees for signalling a clear intent to engage with our sector and her pragmatic tone – made the point that scale and a consolidating market is not necessarily anti-competitive. The regulator is most interested in driving value for the client and if scale is used to do that, there isn’t an issue. The FCA are open to comments and input from our sector on the Platform Market Review – so have your say.
But Mary sent a clear message that total fees of 2% to the client are unsustainable in a low return environment. Many of our speakers from advice firms to platforms acknowledged that fees will have to come down across the value chain.
Getting the basics right was another clear theme of the day. Heather’s view is ‘Don’t try to be Amazon or pretend you will be like Amazon when you have a 24 page onboarding form.’ I argued that e-signatures would make the client experience better on platforms and was challenged by Martin Coyle at Aegon on whether signatures are necessary at all – Aegon will be signatureless. Some platforms, however, feel that when authorising the adviser or platform charge that they need a client signature – if that’s the platform’s philosophy, let’s make e-signatures an option!
David Simpson’s talk signposted the tech developments on platform that we will see coming down the line –a modular approach with assets all in one place will be adopted with platforms behaving like iPhones and hosting all the apps.
Another thread running through the conference was how we marry digital with a personal advice service. It is hard to ignore the impact of digitalisation on the way that we do things: Carlton Hood made this point extremely eloquently – it won’t replace advice but ignore it at your peril. And Dan from Winton Capital Management showed us that if you just rely on the machines without humans you can find correlation in almost anything – including markets and Tiger Wood’s golfing press. Nick Eatock’s data on the Intelliflo Personal Finance Portal also showed us that digital is not just the preserve of the young – the biggest users of PFP are in the 60-69 year old age group. As Claire Philips from First Wealth commented, technology can take a lot of the drudge work out of running an adviser practice through automation– allowing advisers to do the things they really care about like seeing their clients. We are all becoming digital businesses.
It was also great to see collective heads being put together to think about how we can serve less wealthy clients. Many advisers are actively looking at how they can use automated advice to provide a service to a different pool of customers. And we are seeing product innovation in this area – Will Sandbrook, NEST talked about its ‘side car’ savings initiative where contributions are split between the pension fund and a savings fund that is easy to access and will benefit short-term financial health rather than locking all contributions away.
Darwin probably put it best when he said: “It is not the strongest or the most intelligent who will survive but those who can best manage change.” We will wait to see which players prove the most adaptable beasts.
We would like to thank our headline sponsors, Aegon and all our sponsors for making this event possible. We would also like to thank our speakers for their fantastic contributions and the effort they put in to their thought provoking presentations and panels. And we would like to thank everyone who attended. As Peter observed – the level of audience engagement on the panels was the best it has ever been and the detailed questioning showed a real in-depth understanding of the issues.
Until next year.