When we put together our Idiot's Guide to the latest FCA Platform Paper, we invited submissions from all of the platform CEOs. Andy Bell, CEO of AJ Bell, went beyond the call of duty and wrote a very modern, financial kind of drama.

Resistant to any editing, we print it here in its entirety. Andy, you're one of a kind! PS The editors strongly refute any allegations of thigh tickling.

"PS13/1 – Our very own West Side Story" by Andy Bell

Lights. Curtain. And that is that. To coin one of poet Philip Larkin’s phrases, “All great stories have a start, a muddle and an end” and this one is no different. But in this case, our very own West Side Story has a start, a squabble, a muddle, a cuddle and an end.

The story is set in the midst of an economic recession in the financial neighbourhood of a fractious Great Britain. The musical follows the rivalry between two street gangs. It is commonplace in these times for the powerful drug lords to give gangs back-hander cash payments and to arm them with guns. This moving musical explores the forbidden relationship between Bill Jets who falls in love with Petra Sharks when their eyes meet across a drugs conference. It plays to the backdrop of sirens and whistles, with Lieutenant Reggie Lator and Officer Holly Gossip trying to keep law and order.

The start – Apart from the odd isolated spat, both gangs keep themselves to themselves. The balance of power is shifting as the once powerful drug lords are now ceding control to the street gangs. In Act one, Reggie decides he wants to clean up his town. No more weapons and no more cash payments from the drug lords. Bill, who turned his back on the Jets and gang violence some years ago and Petra, the sister of the Sharks gang leader are about to become the central pillars of this Romeo and Juliet classic.

The squabble – Reggie says no more cash funding and no more guns. The Jets say they don’t have any guns and already pass the drugs on at cost to their customers with an explicit handling fee. The Sharks say that cash payments and guns are needed to keep the peace and the local citizens are safer if the status quo prevails. Officer Holly Gossip looks deep into Bill’s eyes as she sings a beautiful rendition of “If you wear a white suit then you had best make sure your underpants are clean.” The bulge in Petra’s pocket suggests she is packing and fully loaded and Reggie is unsure who to believe.

The muddle – Reggie is well intentioned. In a hilarious comedy bordering on farce scene, Reggie makes the mistake of pulling at a piece of cotton on his shiny blue uniform, which unravels in front of the audience’s watering eyes. In a moment of reflection Reggie wonders what will happen in the adjacent towns if he bans cash funding and guns in his town? Will the adjacent towns follow suit or will everyone move house? Will all gangs be treated the same, as there are many other gangs in Reggie’s jurisdiction? Oh heck he says, in comical understatement.

The cuddle – in this slight departure from the original script, Bill and Petra are on stage giving a talk to a mesmerised audience. Law enforcement officers Reggie and Holly await their turn to speak. Bill is maintaining his pacifist line with conviction. No more cash. No more guns. Petra suggests that not only should the gang members be armed, but that they should give surplus guns to the community. That will create a level playing field. Lt. Reggie, stood hand in hand with Officer Holly, announces from stage left that he has changed his name and job description. Officer Holly tickles the inside of Reggie’s inner thigh to get his attention, which she does, and whispers something in his ear. With renewed conviction, Reggie stands up and paints his vision for the future. At that same moment, Bill and Petra look at each other and realise that their futures inevitably lie together. Using words that have been mischievously stolen from the greatest ever Bangles song, Bill sings at full throttle to Petra, “Close your eyes, give me your hand, do you feel my heart beating, do you understand do you feel the same or am I only dreamin....”

The end – in a rip roaring finale, Reggie raises the roof with his final song, with some of the best lines ever sung in a West End musical, including:

• No more cash payments from drug lords to gang members
• Payments to local residents from gangs banned, unless it is just a few quid for a cuppa
• Guns can continue to be provided by drug lords, as long as they are distributed fairly to local residents and gang members don’t hide any under their bed
• Distribution of guns to the local community will be taxable
• Drug lords can continue to pay gangs reasonable expenses but Reggie will be keeping an eye on you
• Reggie will have a drive around adjacent towns to see what dirt he can dig up
• Reggie will turn a blind eye for three years whilst the gangs sort their acts out and then that’s that
• Reggie will be mightily cheesed off if his hard work just ends up with the drug lords making more money
• Will large gangs start manufacturing their own drugs, la la...
• The streets will be super-clean, it is inevitable, its inevitable... its ineeevviittaaaable.

The musical closes to the four main characters doing a Moulin Rouge style can-can and harmony is restored. Bill and Petra are delighted, as they both get what they always wanted, though exactly what that is neither can remember. Officer Holly is delighted as she gets to kick her legs in the air wearing her favourite red high heels adorned by matching frilly dress and undercrackers. But most of all, Reggie is delighted as he has saved the town. Everyone will be safe...or will they? As the lights dim, the silhouette of Bill and Petra’s lips lightly touching is a fitting finish to one of the greatest stories ever told.

Lights. Curtain. And that is that. To coin one of poet Philip Larkin’s phrases, “All great stories have a start, a muddle and an end” and this one is no different. But in this case, our very own West Side Story has a start, a squabble, a muddle, a cuddle and an end.

The story is set in the midst of an economic recession in the financial neighbourhood of a fractious Great Britain. The musical follows the rivalry between two street gangs. It is commonplace in these times for the powerful drug lords to give gangs back-hander cash payments and to arm them with guns. This moving musical explores the forbidden relationship between Bill Jets who falls in love with Petra Sharks when their eyes meet across a drugs conference. It plays to the backdrop of sirens and whistles, with Lieutenant Reggie Lator and Officer Holly Gossip trying to keep law and order.

The start – Apart from the odd isolated spat, both gangs keep themselves to themselves. The balance of power is shifting as the once powerful drug lords are now ceding control to the street gangs. In Act one, Reggie decides he wants to clean up his town. No more weapons and no more cash payments from the drug lords. Bill, who turned his back on the Jets and gang violence some years ago and Petra, the sister of the Sharks gang leader are about to become the central pillars of this Romeo and Juliet classic.

The squabble – Reggie says no more cash funding and no more guns. The Jets say they don’t have any guns and already pass the drugs on at cost to their customers with an explicit handling fee. The Sharks say that cash payments and guns are needed to keep the peace and the local citizens are safer if the status quo prevails. Officer Holly Gossip looks deep into Bill’s eyes as she sings a beautiful rendition of “If you wear a white suit then you had best make sure your underpants are clean.” The bulge in Petra’s pocket suggests she is packing and fully loaded and Reggie is unsure who to believe.

The muddle – Reggie is well intentioned. In a hilarious comedy bordering on farce scene, Reggie makes the mistake of pulling at a piece of cotton on his shiny blue uniform, which unravels in front of the audience’s watering eyes. In a moment of reflection Reggie wonders what will happen in the adjacent towns if he bans cash funding and guns in his town? Will the adjacent towns follow suit or will everyone move house? Will all gangs be treated the same, as there are many other gangs in Reggie’s jurisdiction? Oh heck he says, in comical understatement.

The cuddle – in this slight departure from the original script, Bill and Petra are on stage giving a talk to a mesmerised audience. Law enforcement officers Reggie and Holly await their turn to speak. Bill is maintaining his pacifist line with conviction. No more cash. No more guns. Petra suggests that not only should the gang members be armed, but that they should give surplus guns to the community. That will create a level playing field. Lt. Reggie, stood hand in hand with Officer Holly, announces from stage left that he has changed his name and job description. Officer Holly tickles the inside of Reggie’s inner thigh to get his attention, which she does, and whispers something in his ear. With renewed conviction, Reggie stands up and paints his vision for the future. At that same moment, Bill and Petra look at each other and realise that their futures inevitably lie together. Using words that have been mischievously stolen from the greatest ever Bangles song, Bill sings at full throttle to Petra, “Close your eyes, give me your hand, do you feel my heart beating, do you understand do you feel the same or am I only dreamin....”

The end – in a rip roaring finale, Reggie raises the roof with his final song, with some of the best lines ever sung in a West End musical, including:

• No more cash payments from drug lords to gang members
• Payments to local residents from gangs banned, unless it is just a few quid for a cuppa
• Guns can continue to be provided by drug lords, as long as they are distributed fairly to local residents and gang members don’t hide any under their bed
• Distribution of guns to the local community will be taxable
• Drug lords can continue to pay gangs reasonable expenses but Reggie will be keeping an eye on you
• Reggie will have a drive around adjacent towns to see what dirt he can dig up
• Reggie will turn a blind eye for three years whilst the gangs sort their acts out and then that’s that
• Reggie will be mightily cheesed off if his hard work just ends up with the drug lords making more money
• Will large gangs start manufacturing their own drugs, la la...
• The streets will be super-clean, it is inevitable, its inevitable... its ineeevviittaaaable.

The musical closes to the four main characters doing a Moulin Rouge style can-can and harmony is restored. Bill and Petra are delighted, as they both get what they always wanted, though exactly what that is neither can remember. Officer Holly is delighted as she gets to kick her legs in the air wearing her favourite red high heels adorned by matching frilly dress and undercrackers. But most of all, Reggie is delighted as he has saved the town. Everyone will be safe...or will they? As the lights dim, the silhouette of Bill and Petra’s lips lightly touching is a fitting finish to one of the greatest stories ever told.

And so, for us retail financial services gonks, the biggest game of kiss chase in recent times has ended as life co giant L&G buys Cofunds. Of course this is all subject to FSA approval which in theory can take up to about 60 days – but in practice is unlikely to.

So what does this mean? Well firstly it’s not surprising as the writing had been on the wall for a long time. As an existing shareholder, L&G has not come out and built a proprietary platform as have rivals Standard Life, Aegon and Zurich, for example. Why would you, if you already own 25% of one, has been the common assumption.

And what does this mean for IFAs? Well, the first thing I’m long enough in the tooth to know is that nothing will change overnight for the platform users. These things take a while to filter down to users. So no need to panic. L&G spends enough courting advisers not to want to rock the boat and there are some big wholesale deals here to look after.

What will be called into question is the long-term strategic intent of the acquirer. Business as usual? A platform which continues to support B2C (indirectly), adviser and institutional business? Or an internal engine for a life company adapting to life post-RDR and all the new and exciting opportunities which that represents? Let’s not dismiss the not inconsiderable amount of money that L&G already has on its version of the Cofunds platform with enormous great big customers like Nationwide (which we can lose sight of over in IFA land).

Interoperability is a major step forward for the industry, creating huge benefits for advisers and their clients. Origo MD Paul Pettitt explains why

Re-registration of client assets has become an increasingly important subject in financial services over the past 12-18 months, not least because the FSA has turned its spotlight on this area as one of concern in terms of Treating Customers Fairly (TCF).

The Regulator gave platforms until the RDR deadline, 31 December 2012, to put in place systems sufficient to deal with asset transfers, although it did not determine an acceptable time period in which the transfer should take place.

In addition, both the FSA and the Financial Conduct Authority (FCA), which takes over as Regulator this year, have made it clear that they will be looking to ensure the way the industry operates is firmly aligned with customers’ needs, making the need for platforms to be able to carry out efficient re-registration of assets a priority.

From a client-centric perspective the reasons to enable efficient re-registration are obvious. There are clear areas of potential customer detriment, where re-registration is either not enabled or is slow and complex. By encashing the client’s assets in order for repurchase, the client will be exposed to market risk from being out of the market, potential tax liabilities, and lost investment opportunities. Cash is fine for many transfers, but not all transfers. Given the broad agreement in the industry that a significant amount of assets will transfer from place to place in the coming years, it’s clear that a simple, quick and holistic way to transfer assets is required to reduce costs, payment delays and possible reputational and compliance risks. In terms of TCF, transfers should take place as soon as possible and those platforms carrying out the transfers using an automated process are going to be setting the benchmarks and driving the industry forward.

The Platforum are pleased to announce their shortlist for the Leading Innovation on a Platform award, to be announced on Thursday 28th February.

The shortlist is:

Aegon. ARC is the first platform in the UK to combine an adviser platform with a workplace savings platform giving employees and investors a facility to self-serve. The ability to switch seamlessly from accumulation to decumulation is truly innovative and an important development in the platform market.

By Patrick Mill, Managing Director at Alliance Trust Savings

The topic of how many platforms is enough to meet the needs of all of an IFA's clients is one that has been much debated in recent months. To date the majority of advisers will have adopted a single platform approach. However, the FSA have made their position clear. If you are using a single platform, you must be able to evidence that it caters for the needs of all your clients. In the FSA’s factsheet for financial advisers on platforms they state "The suitability of any platform will depend upon the client’s particular circumstances and requirements. Irrespective of any strategic firm decisions to use a platform, you must still consider whether a platform is suitable and meets each client’s needs before recommending it. This includes recommending that existing clients move onto a platform." The FSA believe that it would be very rare if not impossible to only offer access to one platform and retain your independent status.

To understand how many platforms you may need going forward the first step is to segment your client base. You may want to seriously consider adopting 2 or 3 platforms to minimise the need to go off platform for recommendations. You may have aspirations for your business to serve the high net worth end of the market only but a realistic assessment may indicate diversity across many different metrics from wealth, attitude to risk and investment choice. If you assess your client bank and conclude that your clients needs do vary then this would point to the need for a multiple platform strategy.

A key consideration when adopting a new platform is the investment choice and whether this will cater for all or a segment of your clients. Historically this has centred around mutual funds, however, RDR now requires independent financial advisers to consider the suitability of other investment types including ETFs / ETCs, investment trusts and equities. Historically many platforms have evolved from fund supermarkets and may not offer ETFs or investment trusts for example. Also be aware that it may be the case that those platforms with no history of offering these investment types are being supplied themselves through a third party with limited integration meaning moving from one platform to another to effect an investment instruction.

As more platforms reveal their post RDR fee structures it is clear that the majority of platforms going forward will replace lost revenue from the ban on rebates via a bps based charge which is likely to range from 0.25% - 0.60%. Some platforms may go down a tiered bps based route but in either circumstance clients are paying the platform a different fee dependent on fund value. If you have high net worth clients with an ISA worth in excess of £100,000 or a SIPP with a value of £250,000 why should they be paying more for the services of a platform than a client who has more modest ISA fund of £25,000 or SIPP fund of £50,000? It is more likely that the services that you, the adviser offer may differ in this scenario but not the services of the platform. On this basis it may make sense that one of your chosen platform providers operates on flat rate, fixed fee basis as the savings could be significant.

Once client needs have been segmented and it has been determined that a multiple platform strategy is appropriate, care has to be taken in the final platform selection. Adopting two platforms that are identical to each other in terms of investment choice, product range or price may not address the fundamental point of client suitability – in this case, 1+1 may not equal 2 if the platforms are in essence identical. If a segment of your client base has very defined needs then your platform selection needs to be aligned to that need.

The FSA have been clear that as well as expecting advisers to be clear on their client base and ensure that selected platforms meet their needs platform providers also should be clear on the target market of their proposition. As it is unlikely most advisers will be able to validate that one platform fits them all equally, can any platform provider put their hand on their heart and say that their offering can cater for all of your clients needs? Why not ask potential platform providers what their target market is and why they may be suitable for a particular segment of your client base?

What does the future look like for your clients?

Inertia
People live in the here and now; their horizons are around 10 years and often less when absorbed with very busy ‘time poor’ lives. More than 70%* acknowledge that they’re responsible for saving for their own retirement, but relatively few actually believe that they’re on course to reach their desired level of income. Despite this, many aren’t taking any action either because they feel they can’t afford to or they don’t know where to start. This inertia will be countered by the introduction of auto enrolment where employers will be forced to contribute to a pension scheme for their employees.

The changing role of workplace provision
The growing focus on workplace savings brought on by pension reform means employed clients are likely to have at least one, if not many pensions when they get to retirement. However, the job market is changing, in a lifetime people have more jobs than previous generations did, and a more recent trend is for employers to have a more agile workforce of contractors to cut the costs of providing permanent staff benefits and to ensure their workforce is fluid enough to manage only the task in hand - 54%* of people think that it’s likely their employer will reduce workplace retirement benefits in future.

In addition to a multitude of small pension pots, they may have individual policies and other savings that will be important to consolidate to get a full understanding of the likely options available to the client. 71%* of employees believe that future generations will be worse off in retirement than current retirees, reversing the long-established notion that each generation should help pave the way for future generations to enjoy a higher standard of living.

Retirement isn’t a point in time
People are moving away from seeing retirement as a time when work stops completely: 69%* of employees expect to keep working in retirement in some form. In addition, when people do retire many want to live an active lifestyle and are therefore looking for alternatives to traditional fixed income products and opting instead for flexibility.

Retirement isn’t a point in time

This article highlights key findings of AEGON’s recent research into the current prevailing attitudes on retirement planning and personal expectations among the current working generation.

Changing patterns
As a result of the financial crisis, UK consumers now expect to have to work longer and anticipate that state pensions benefits will be less valuable due to cutbacks. However, more than 50%* believe that despite the down turn, saving for the future is more important now than it has ever been.

People are also moving away from seeing retirement as a time when work stops completely; only 22%* of workers expect to ‘immediately stop working and enter full retirement’ compared with half (50%*) of the current generation of retirees. Instead, alternatives such as working part-time, on a temporary contract or just carrying on working full time beyond retirement age are on the increase.

Changing lifestyles
This evolving vision of retirement not only signals an end to the traditional “retirement cliff” and retirement age pattern, it also offers opportunities to stay active and maintain social networks while still contributing to society. “Silver entrepreneurs” could become more common as people combine projects like starting their own businesses with travel and leisure pursuits during retirement.

In addition, when people do enter ‘retirement’ many want to continue to live an active lifestyle; spending more time travelling is the most popular ambition and 21% would like to retire to another country**. Enjoying more time with family and friends and pursuing hobbies are also important retirement aspirations for UK consumers.

By Dave McGovern, Head of Retail Marketing, Standard Life

Mind the gap

The requirement to disclose adviser charges in cash terms puts a definite price tag on financial advice. Asking someone to pay what might be a few thousand pounds a year is, psychologically at least, quite different to quoting a 1% ongoing charge.

And with industry research showing that clients’ expectations of the cost of advice are lower than the reality, closing this gap will be a key part of the RDR transition for many advisers and clients.

It’s in the best interests of consumers and the industry at large that advisers are successful. Our recent research with http://unbiased.co.uk (The Value of Advice Report 2012) showed that advised consumers invest a higher proportion of their wealth, delivering a better client outcome and securing a sustainable future for the industry.

By Holly Mackay, Managing Director, The Platforum

Skandia has always been the platform which polarises opinion the most in the market. So it’s quite difficult to wade through the noise around the Marmite of platforms and get to an unbiased opinion about their new pricing structure.

So here goes. The Marmite has gone all sort of strawberry jam on us and produced a pricing structure which is – well, fairly undramatic and not that controversial.

As always when conducting any comparison, advisers need to look at the headline administration fee alongside any fixed fees, product wrapper fees or transaction fees. What I like about Skandia’s structure is that it is relatively straightforward, with no extra product fees or transaction fees, and the platform fee (and a £56 drawdown fee) will be its only source of revenue. Margins retained on cash are negligible and cover running costs only. So whilst 50bps for clients in the sub £25k band, and 35bps for assets in the £25k-£100k range might sound relatively high compared to some peers, when it is looked at in the round with no fixed fee and no additional tax wrapper costs, we think it is broadly in line with the market. Click here for specific pricing details.

Back of a fag packet stuff and in a neutral fund rebate and tax wrapper environment (NB big assumption), you’re looking at a fee structure which might make it circa £20 more expensive per annum than some of its traditional competitors for a smaller portfolio of circa £30k. It’s pretty marginal.