17th February 2012

As we put the finishing touches on our new Platform Analysis Tool for launch next week (yes, PAT is getting a new frock), we’ve seen some really dramatic changes to the environment of even a year ago.

Price has been dynamic. Although the incumbents haven’t changed THAT much, there are some impertinent new players all pitching their wares to the adviser market. Hindsight’s a great thing – new propositions have seen that spending a lot of money building tools and shiny stuff on platform isn’t necessarily a great idea. There’s a decent number of advisers just wanting pretty straightforward services at a low cost. Sippcentre, Alliance Trust and re-positioned Aviva have made platform pricing more competitive, especially for smaller portfolios. So if you view price relative to peers, rather than as an absolute, that’s a challenge for the incumbents.

The other thing we’re trying to do is to work out exactly who is good at what. For example, we’ve identified lots of different adviser investment approaches from running proprietary discretionary funds requiring international assets and “GIPS compliant” reporting right down to transactional business. Each platform will usually tick a couple of boxes in what they are particularly good at supporting. Let’s look at some examples – our opinion only. Raymond James is a good option for advisers with discretionary permissions running portfolios; 7IM is competitive when advisers want the platform and some investment solutions (discretionary or funds) too; Novia and Ascentric have arguably led the charge to connect to 3rd party DFMs; Skandia of course pioneered risk-rated funds and Aviva’s new wrap provides access to their risk-rated funds at 20bps. Cofunds provide the Distribution Technology risk profiler which connects to 7 external risk-rated solutions. And new this week, Fidelity has launched a tool called Navigator for platform clients which takes clients from risk profile to a passive multi-asset fund. Investment solutions are becoming ever more integrated to platforms. Vertical Integration Mark 2.

There’s a whole range of investment approaches catered for there. Not every platform can be good at everything and a blind adherence from sales and marketing teams to simply getting as many assets on board as possible (regardless of whether they’re the right fit) doesn’t help anyone in the long-run. AUA as a success metric isn’t always a very useful tool – especially moving forward in a world where ad valorum (or fixed fee) costs are creeping in.

Having said that, with a dollop of self-aware irony, we can announce in a terribly exciting global scoop kind-of-way that platform assets as at December 2011 were £176.4bn. Front page of “Time” here we come.

Next Thursday night is the launch of our first platform ratings as well as revamped PAT. Who has won the User Leaderboard and who will win The Platforum Leaderboard? If you are in London and would like to join us for this star-studded bash (!) then please contact Chloe.

Finally, the aquatic members of The Platforum team were at last given a name this week, thank you to all of those who voted. I can announce that it was a landslide victory for Matthew Hayward’s suggestion of Bips and Baits so well done to him and voting support from his Zurich colleagues – a bottle of champers is on its way!

Have a lovely weekend all, Holly