The adviser platform market is more sluggish and less competitive than one might have expected from the number of players and the greater ease of moving assets between platforms. A steady but slow decline in platform charges has continued in the last couple of years, but market penetration by the innovative newcomers has been disappointing so far.

One reason for this stasis is that advisers have been generally reluctant to switch platforms for their existing clients, even though they have been prepared to redirect flows of entirely new business. Advisers reckon the time it takes them to make these switches – reassessing suitability in particular – outweighs the savings for clients. So the net result is that the bulk of assets stay put.

Things may be about to change. Platforms’ customers – the advice firms rather than the end-investors – are also consolidating and wanting to improve their margins. The newly enlarged businesses are likely to be more demanding of platforms.

Private equity-backed wealth management businesses are already stirring up the market as they seek fatter margins from vertical integration. Their strategies are likely to lead to reappraisals of their arrangements with platforms.

Regulatory pressure from the FCA’s Consumer Duty initiative might put additional pressure on charges generally, with advice fees coming under scrutiny and growing impetus for much greater efficiency.

Advisers’ inertia limits switching between platforms and this hampers competition, making it harder for new entrants (and more accomplished platforms) to gain market share. A combination of regulatory push and commercial pull looks set to change the dynamics.

Platforum published its quarterly update on the adviser platform market this week. UK Adviser Platforms: Market Overview provides updated figures on the market, as well as advisers’ views on individual platforms and the overall direction of travel.