Ownership change
The nature of platform use by advisers means that any ownership changes could potentially have a big impact, and at the very least will raise a number of questions that need to be clearly answered.
The main, or primary platform used within an adviser firm could expect to attract around 80 per cent of that firm’s investment business, and as a consequence the level of support the adviser firm requires and expects is significant.
A change in ownership creates the need for clear, timely, communications to advisers, delivered through a number of channels (face-to-face, email, the press, social media) all with a consistent message.
This type of communication campaign can be tricky to execute at the best of times. It is almost impossible when the provider’s staff are more concerned about their own future.
Advisers stake their personal and business reputations when making a personal recommendation, trusting that the provider will be a safe and sound home for their clients’ assets. It is therefore understandable that supporting advisers will also be nervous about what the future might hold if they have assets on a platform going through a consolidation.
The key points to consider are, is this provider still a safe home for my clients’ investments, and are they still able to provide me and my client with the level of support and service I require? Advisers should focus on these questions, seek out answers if they are not forthcoming, and document their findings.
For most consolidation exercises there is no immediate need to press the panic button, and this is certainly the case for the moves that have recently been announced, and, at the time of writing, are about to be announced.
The reality of moving a client from one platform to another is the main reason why the panic button should not be pressed without careful consideration. Current estimates suggest that managing a platform transfer may cost at least £500 worth of adviser time.
I am really not sure this is accurate, but it is still better than the ludicrous (and frankly terrifying) £2,000 that some suggest. Advances in technology have driven down process costs, so even £500 feels a little ‘toppy’ to me, but that is all we have got to go on. So let us just call the cost ‘significant’.
| Key Points |
A number of providers are finding out the hard way that being a platform is not as easy as they thought. The nature of platform use by advisers means that any ownership changes could potentially have a big impact. To help advisers through this work, the providers need to take responsibility and provide access to clear factual information regarding the current and future state of the platform. |
