‘Advisers don’t need their platform to make money’
Wills and Trusts Wealth Management's founder, David Batchelor, argued advisers are usually closer to clients than product providers and so are in a better place to design a platform that meets their client needs, where platforms will always create a mass market generic product.
Batchelor explained: "For example, if you focus on the more mature clients (say age 60+), then you will build a very different set of features compared to those that are building a platform, that is designed for the GPP market.
"Advisers building their own platform do not need the platform to make money, if it is not a profit centre. All of the commercial platforms need to make money to satisfy their owners. An IFA-built platform can be run at cost as there is no need to use it to generate income."
As the world of IFA’s reduces in size, Batchelor reckons IFAs will come together to develop economies of scale in a "co-op" type way.
"This is in fact what we have done. There are 20 or so firms which are using our discretionary fund manager and will be able to migrate clients to our platform when we think it is ready. The group gets together quarterly to work on best practice and developing more client focused solutions and products than a provider may create."
Impact of M&A activity
Some restricted advice models have also emerged out of recent merger and acquisition activity. Earlier this year, Aviva bought advice firm consolidator Succession.
Being a platform provider, many highlighted the restrictions such a deal could place on Succession's advisers if they advise on products on their owner's platform.
Initially, Aviva’s chief executive officer of UK & Ireland Life, Doug Brown, suggested a platform migration of Succession’s advisers to the Aviva platform could be on the horizon.
Currently, Succession clients use a handful of platforms, including a white-label Acsentric platform.
But Aviva’s strategic platforms director, Mike Hogg, has since confirmed it will be Succession’s advisers - not Aviva - who decide which platforms their clients end up on.
An Aviva spokesperson said Succession already has a platform is uses, and that Aviva has its own adviser platform "which we think is extremely strong".
They added: "We think we have a strong offering across our platform and asset management capabilities and we will work with Succession Wealth to determine the best proposition for their customers and advisers.”
ruby.hinchliffe@ft.com
