One in five advisers could be on the look-out to move away from their primary platform according to Platforum’s latest research – UK Adviser Platforms: Spring Update – which we published this week.
Advisers are pretty satisfied with the main platforms they use, but not as happy with them as they were a year ago. 80% of advisers say their primary platform is their preferred platform. In contrast, this number was 87% a year ago. So, about 20% of advisers have the largest proportion of their assets on platforms with which they are not especially enamoured.
The Platforum User Leaderboard could provide some data about where they could end up switching. The very top spots are taken by smaller platforms, with P1 Platform retaining its number one position. AJ Bell Investcentre (at #5) and Transact (at #6) continue to rank as the highest-rated larger platforms.
Business on adviser platforms is starting to bounce back to pre-pandemic levels following three years of volatility: a dip in AUA at the outset of the pandemic, then six quarters of uninterrupted growth before the war in Ukraine sent new flows tumbling. Assets started to rebound at the end of 2022, a trend that continued in to Q1 2023. Net flows were up and asset growth exceeded stock market movements.
The level of total advised assets on adviser platforms is now very close to where it was a year earlier, only 0.3% lower than March 2022. Some platforms have improved on their positions, with True Potential, Aviva and AJ Bell Investcentre recording strong growth across the year.
However, there are some clouds on the horizon in the form of competition from cash deposits. After nearly 15 years of low/falling interest rates, cash is now back with a vengeance – advisers are telling us that more clients are questioning whether 4% returns on bank deposits are a better option than investing. Further rate rises are predicted following worse than expected inflation figures this week, making cash even more attractive. This has the potential to both stifle platform inflows and prompt some withdrawals.