He is not alone in this view and there are plenty of others on the buy and sell side of the UK investment fence – as well as those platform providers building the fence – that are piling small fortunes into this being the case.
Some facts and figures from CoreData Research released this morning show that platform and fund manager costs trump considerations of, among other things, the range of products available and services offered when it comes to advisers’ platform choice.
CoreData Reserarch found advisers want platforms to do better in terms of offering:
- a wide product range and flexibility;
- lower cost, better value;
- better service, administration and support.
No matter how good the product offering, no matter how cheap it is to run, and no matter how good the service, intermediaries will always say they want more of it, for a lower cost, quicker and more efficiently. I don’t think independent research was needed to reach this conclusion.
David Cowell, chief executive of Myddleton Croft, promptly asked the question: “If platform costs are a major concern, why use a platform?”
[If there is a true cause for concern, it should be that CoreData Research says just 29% of advisers are likely to recommend their main platform to another adviser.]
We can quibble over the fact the research says costs are a ‘consideration’ for advisers rather than a ‘concern’ but without platforms where would we be right now?
Let’s not forget that a platform is a sophisticated piece of technology that offers intermediaries access to what is in effect a custodian bank to control new and existing assets as well as clear and settle trades for numerous clients at the same time.
Imagine how high the costs would be for intermediaries to have to do the same level of transactions, at the same speed and with the same level of accuracy without this piece of kit – and think of the amount of paperwork that would be created.
As Bowles added: “They are one of these rare things where everybody is better off. Clearly we as the DFM is better off as we just like running money; the IFA is better off in that post-RDR they have more time to spend with their clients and can charge for advice; and the client is better off because I believe by having a DFM run the money they will get a better service than giving it to the IFA.”
There is little argument then that platforms are indeed fantastic and the future – the real platform debate is still about the abolition of cash rebates (27 September is D-Day) and the extra cost of them processing enhanced units for clients instead.
