That is quite a big proportion when you think about the apparent time and efficiency benefits associated with using a platform.
It also seems surprisingly high because anecdotally I don’t think I’ve come across any advisers that don’t use platforms for any of their business at all.
Yet My Touchstone, an IFA database run by Equifax’s Touchstone Financial Analytics, says 8,400 firms are yet to adopt a platform.
It is widely believed that more and more firms will start using a platform in the run up to RDR in order to cut down on the back-office administration they are required to do.
Further statistics from My Touchstone seem to support this idea, with 162 adviser firms starting to use platforms for the first time in Q2 2012, building on the 188 that started in Q1.
My Touchstone also reported an increase in the number of advisers that placed all of their business via platforms in the second quarter of the year, which shows more firms choosing to fully integrate platforms into their business strategy.
One factor that might be holding IFAs back from selecting a platform is that the FSA is still to issue its final guidance on platform rebates and charges.
FSA restrictions
In the meantime there is no level playing field in which to compare platforms because different firms are pursuing different strategies.
Peter Welch, IFA key account director for My Touchstone, said: “Although the number of IFAs placing all new business ‘off’ platform is slowly decreasing, our data shows there is still a significant segment of the market still to adopt a platform partner.
“With RDR just round the corner, many firms may be deferring platform adoption until after they have made the transition.”
There are now 30 potential platforms for an adviser to choose from, according to My Touchstone, which means an in-depth due diligence exercise is required if the firm is to satisfy the FSA with its choice, particularly as the FSA would rather advisers used more than one platform.
The regulator’s view is that it is very unlikely that just one platform will be appropriate for all client needs.
With all the changes IFA firms are implementing ahead of RDR, it is understandable they might want to defer some less pressing decisions.
But what are the main questions they should ask when they do get round to assessing platforms and choosing one that is the right fit?
This is something we plan to cover more in the coming weeks and months, and we would like to know how you chose your platform provider. Use the comments box below…
