It suggests that, in some cases, platforms are still not doing the basics well enough, and they will have to raise their game if they are to survive in an increasingly competitive environment.
On the face of it, the platform industry looks to be thriving. New entrants are still entering the market – Aviva launched its D2C platform in June and assets under administration continue to grow: At the end of Q2 2014 assets under administration on adviser platforms were £271.08bn; just a year later they had grown to £326.19bn, a 20.33% rise at the same time the FTSE 100 recorded a 3.3% dip. The report said: “These figures demonstrate that money from “old world” products continues to make its way over the hall.”
Equally, the industry as a whole appears to be benefiting from the pension changes, with a number of platforms reporting substantial double digit increases in new business flows into both pension and drawdown arrangements.
The industry is also benefiting from a wider increase in demand for advice. The report says: “The pension reforms (have created) a genuine need for wealth management before, at and during retirement. This in turn creates an opportunity for advice firms to work with customers for, and across generations, delivering advice in a manner that suits customers’ needs, be that face-to-face and/or digitally.”
That said, platforms are facing an increasingly competitive landscape. This is not simply from an already crowded market – but also from other areas: Asset managers, for example, are increasingly looking to create additional routes to market, rather than relying on third party platforms to sell their funds. Schroders has a substantial stake in Nutmeg. ‘Robo-advice’ is growing in prevalence and sophistication. BlackRock acquire the US based robo-advice firm FutureAdvisor. Individual advisers are also building their own platforms: Roberts Clark, for example, has recently built a ‘robo-advice’ solution for smaller clients.
