This isn’t because it’s any easier to do any of this stuff. If you’re going to derive revenue from providing platform services then you actually have to provide them. You can’t stick a logo on someone else’s system and whack 25bp on to your charge.
That means you’ll be involved in becoming a platform operator, albeit one that outsources a huge amount of the day-to-day unpleasantness to an underlying provider. You’ll be involved in the control environment, in middle and back office, and you’ll need your safeguarding permissions in most cases.
All this comes at a cost, usually in headcount, and especially in people who know their way round the client money urtext, the Client Assets Sourcebook, and now the senior managers regime. You can make money doing this, but you have to want it.
The thing that’s opened this market out is a group of providers who are starting to switch on to the potential of helping firms do this. To my mind there are three main contenders here – Embark, Hubwise and Seccl – all at different stages of their journey.
The big three
Helpfully, for those of us who don’t remember things like we used to, they go in alphabetical order in terms of how mature their proposition is.
Embark – 9 per cent owned by the provider of its underlying technology provider, FNZ – is the longest established and has a wide and varied book of business. But at least some of its energy is in providing what I’ll call ‘deep white label’ services to firms. Companies in this context can also include smaller providers who don’t want to do all their own stuff any more. For example, Embark has a really nice signature-free, self-invested personal pension product that now sits inside Nutmeg, among others.
The way to think of it is that if you wished you could approach FNZ directly to build your own platform, but you can’t afford it because you’re not Standard Life or Quilter, then you have a way to access that technology with a lower price point. You give up some control, to be sure, but you have more control than if you were simply consuming one of the retail FNZ platforms.
Hubwise has its own proprietary technology and has been making waves with a very low-cost offer to providers. If you know the Figaro share-dealing system, then you know the folk behind Hubwise, hence they have some experience to draw on. It has deals in place with Tenet and with Tatton, so smaller firms can access what it does too.
As you’d expect, if you approach Hubwise looking to partner up on an ‘XYZ IFA platform’ type deal, then you’ll have more control over what you get than if you approach as a smaller firm that’s a member or supporter of those organisations.
