Over the decade that Platforum has been covering platforms, we’ve seen the market evolve and mature. But sometimes it’s worth getting back to basics and posing a much simpler question: what exactly is a platform?
In our soon-to-be-published UK Adviser Platforms report, we’ve developed the Platform Hierarchy of Needs ranging from features that are core requirements for a platform, to those that are simply ‘nice to have’. And which features are more likely to prompt new business and which prompt business to move away? This is based on conversations with the advisers that use them.
Platform fundamentals – providing custody, facilitating transactions, having tax wrapper choice and accessibility – are non-negotiable. Advisers’ judgements about these functions typically result in a binary decision: either a platform fits the criteria for a particular client (or segment of clients) and they can use it – or it doesn’t, and they can’t.
Aside from the fundamentals, other features differentiate platforms and are all traded off against cost. While features such as decent reporting and the timely fixing of errors are important and have an impact on how much new business is directed onto a platform, it can take a while before failings here lead to client assets being transferred away.
Nice-to-have qualities, such as pre-funding switches, seamless back office system integrations and greater drawdown flexibility, serve as the key differentiating features between platforms in the market. Getting these right will serve to further embed a platform into an advice business.
We’ll be looking at platforms and their role in intermediated distribution within both the UK and Europe at Platforum ID – the investment distribution conference on 2 October. Click here for more details and register for your place.