Advisers are rightly focused on securing good outcomes for their clients so they expect the platforms they use to support them to that end, writes Chris Law head of UK platform sales at Morningstar Wealth.
One reliable indicator of adviser needs and concerns in this respect is the type of questions they ask of platforms, especially those queries that go beyond the basics of product availability and system functionality.
Transparency can help overcome concerns around stability
Over the past couple of years, we’ve seen firms increasingly focused on platform stability, both in terms of financials and business plans.
Whereas advisers previously tended to focus on parent company assets and profitability as a mark of financial strength, they clearly now have a closer interest in the future of the platform operation itself and why the parent company wants to own a platform business.
For example, if an adviser asks a platform whether they are committed to the market, this points to concerns that they and their clients might be adversely affected by a merger, acquisition, replatforming exercise or withdrawal from the intermediary market at some point in the foreseeable future.
Advisers have seen this happen at various platforms over the past ten years and may even have experienced some level of chaos themselves. It’s no good just responding with a simple ‘yes, we’re committed’, advisers deserve transparency about any plans afoot that may potentially disrupt their business and their clients.
Digitalisation is no longer optional
Another interesting evolution in the questions advisers ask concerns fintech. It’s apparent that many advice firms are more eager to streamline their business processes, both to take costs out of their activities and to make life easier for their clients.
Advisers want platforms to collaborate to eliminate paper and wet signatures, as well as integrate better with their CRM and be proactive about key elements such as asset transfers. They are aware that all of this rests on technological capabilities at the platform end.
Platforms that have to queue up for developments from third-party technology partners may well frustrate advisers looking for faster access to fintech solutions that could resolve their pressing needs.
Similarly, advisers who are looking longer term at succession issues, and passing on the baton to a younger cohort of colleagues, appear to be increasingly turning their attention to intergenerational wealth transfer and how technology can facilitate this.
While their current client base is certainly tech savvy and frequently makes use of online portals (confounding an outdated but persistent belief that older people are uncomfortable with tech) the next generation of clients is bound to expect a fully digital experience of financial advice and investing, albeit with a human touch at the outset and at periodic reviews. I believe a platform unable to provide advisers with a smooth digital-first proposition will struggle here.
Consumer Duty is making a difference
I’ve noticed that firms increasingly want their platform to cooperate around communications and marketing. Certainly, to ensure that their clients get the right information at the right time about their investments, but also value-add support in respect of market fundamentals, themes, current opportunities and risks pertaining to their objectives.
This, and other value-added services, are in keeping with Consumer Duty requirements, as well as being inherent to the in-depth support a firm expects from a platform wishing to keep clients’ assets aboard.
The FCA says good support should be treated as a given rather than a factor in choosing a platform, and based on the firms we regularly speak with, advisers are clear in what they believe ‘support’ includes.
When it comes to aspects such as help with switching clients in bulk and chasing up ceding schemes, the platform is expected to step up and do some heavy lifting, freeing up the firm’s time.
Firms are also probing more about value for money, particularly in light of Consumer Duty. With advisers encouraged by the regulator to review the client charges levied by their incumbent platforms, I don’t think any platform can now sit comfortably if they maintain charges significantly higher than a competitor platform that offers just about the same features and advantages.
All told, it falls on all of us providing an investment platform to listen closely to what advisers ask about, as a sure sign of what concerns them the most.
Keeping up with this, being transparent and adapting promptly and appropriately is vital. We’re all in this together as part of serving the end clients well and playing our part in creating good outcomes.
This article was written for International Adviser by Chris Law, head of UK platform sales at Morningstar Wealth.