Why the self proclaimed platform giant is mocking you

I'll start and end with the recent news that Skandia has performed a spectacular u-turn and is no longer planning to offer re-registration away from its platform.

Is this how it is going to be? Proclaim yourself as the leader in driving re-registration, drop prices, drive a huge increase in volumes and then lock everyone in? I don't think I have ever seen a more spectacular (and arguably cynical) turnaround and I urge IFAs to vote with their feet (and their clients' portfolios). The self-proclaimed platform giant is mocking you and if the FSA and the self-elected UK Platform Group don't step in now I don't know when they will.

While our Southampton-based legacy competitors have been concocting their latest marketing tactics we've been busy getting on with the business of listening to IFAs and ensuring our platform development is heading in the right direction.

The last month has seen an exploratory session around the marketing efforts of Nucleus shareholding firms, three user sessions and the latest sitting of our IFA Advisory Board. I have to say that the general mood has never been so upbeat and I am looking forward to the rest of the year.

At an industry level we've seen life offices confused about whether the GPP market is a good place to be or not and a huge question mark placed over the variable annuity market as the once giant Hartford Life withdrew from the UK (and pretty much everywhere else). Now that Clive Cowdery is reported to be back on the acquisition trail the big question in the retail sector is where to allocate capital. Is it in running off the past (zombie-style), taking on risk (variable annuity anyone?) or re-inventing as a platform or asset-gatherer? Or none of the above? My sense is that some of the fundamental changes we have been discussing and mulling over for years are finally coming to pass. Perhaps fuelled by the general shortage of capital there is a lot of navel-gazing going on and I think we will see some fundamental industry changes over the coming twelve months.

Back to Skandia, I find it fascinating to see how the firm believes margins will emerge in future. It sees advisers' portion falling from 0.70% to 0.55% and life office margins falling from 0.75% to 0.55%. My first observation is that any life offices taking 0.75% are offering customers a very poor deal, particularly if this is for a closed or constrained architecture proposition. Nucleus charges 0.35% and allows IFAs and their clients' access to any sterling-denominated fund, security or other asset. Secondly as the overarching trend is for value to drift towards the client/IFA relationship it is staggering that Skandia sees IFA margins being squeezed. The only party in this industry that is providing a tailored, bespoke service is the IFA, and more specifically higher quality IFAs. The margin trend in the IFA sector is going in only in one direction if you ask me, and it isn't down. If I were a cynical man I might suggest that Skandia is trying to force a squeeze on IFA margins rather than letting the customer decide what a fair price is - perish the thought!