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Topics: | CWC research| RDR| Scottish Widows
Platforms should come under the same whole of market regulatory scope as investment products post-RDR, according to advisers.
Over half (54%) of 226 IFA surveyed by Scottish Widows in December think the FSA should adopt a level-playing field approach to industry regulation. This would include the same focus on transparency for platforms as areas such as adviser charging.
Those polled think advisers should offer more than one platform in order to provide a truly independent service. A third of intermediaries using platforms (31%) currently use two, with 28% using three or more and a further 31% using just one platform.
"It is clear from the research advisers agree there is a need to retain optionality and not design their operating model around a single platform," says head of distribution development at Scottish Widows Robert Kerr.
"It is unlikely intermediaries using wrap platforms will want to have more than a few adopted within their business models. However, getting the best deal for clients and offering a true independent service will mean reviewing the whole market and in particular reviewing the costs associated with the many propositions available," he says.
Despite the Scottish Widows survey pointing to the importance advisers attach to multiple platforms, research conducted in December by CWC Research concluded nearly 80% of adviser firms prefer a single platform.
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Think about it
If we try and rethink what we do as IFA's or Financial Planners and forget about what proviedrs or the fSA think we do-concentrating instead only on what we do for our clients then we may discover that if we are able to place client money on a Platform without the platform charging, and we are able to make investments with that money within free tax-wrappers at no entry fee into collective funds, we are providing all the 'products' that the client wants at no entry fee. If the Platform charges absolutely nothing except 0.35% per annum of the clients' fund and we charge say 0.75% and the InvestmenT house AMC is cut in half, teh client ends up paying no entry fee, and a total of about 1.85% a year (as opposed to 5% entry fee and say 1.5% a year retail with no advice). Using this Platform system, whilst we continue to need annuity providers, SIPP providers who do property, and we continue to need Protection providers (at present), we don't need anyone to give us ISA's or PPP's or a General Account in which to hold OEIC's etc, and we have an inbuilt Client Management System making our jobs as Financial Planners and Investment Advisers that much easier. Using the Platform means that we cut off the flow of our client's capital into know all dusty leviathan insurance companies whom we actually now realise we have no obligation or need to support
Posted by: snooks
More paternalistic nonsense
As has been said, it depends who you ask - forgive me for being cynical but when a a life office (which does not have a presence in the platform market) pulls together some research with one eye on telling IFAs how to run their business I find it terribly difficult to take the results seriously. The platform market is currently growing at around 10%/quarter and inevitably some of that is being driven by IFAs seeking greater efficiency in the delivery of their propositions, which on some occasions will involve using one platform for a large number of clients. Get over it chaps - the world is changing - you'd be far better jumping on the train rather than trying to stop it.
Posted by: David Ferguson
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Depends who you ask
The adviser industry is what investment analysts like to call a non-homogenous service industry, i.e. there are a great variety of different business models and styles. If you ask those well on the way to 'new model adviser' style wealth management, they will prefer the simpler single wrap model. Advisers still stuck in the belief that what the client wants is a choice of different products, will continue to think that they need to use a number of wraps (which rather misses the point as to what wrap is about).
Posted by: Stan Kirk