Platform debate: 'In an ideal world, we would use a single platform'

Axa Wealth’s Gary Thompson, Ascentric’s Hugo Thorman and IFA Mark Hughes joined Lawrence Gosling for a debate on the future of platforms

Q. Mark, your business uses three platforms. How did you arrive at that?

Mark Hughes (MH): If you had asked me the question five years ago, I would probably have said that, by now, we would be using one platform. But dissatisfaction with certain providers and the fact not every platform suits every client are the main reasons we now use three. This is going to be the norm.

Gary Thompson (GT): I remember some research earlier this year that suggested the average number of platforms used by an advisory business was 2.1, and I think that is because of the kind of scenario Mark has outlined. An early decision might have been made on one particular platform and then others have come along and the adviser has taken advantage of some new opportunities in the market. I think what tends to happen is that, for those advisers that use more than one platform, by default one platform is used for most clients while others will be used for those scenarios where the original platform doesn’t quite fit. That makes perfect sense to me.

Hugo Thorman (HT): [We find] our customers are tending to use us for the majority of the time, but definitely not always. There might have been a legacy platform there, [and] very often a fund supermarket and they work together well sometimes because of the lower end of fund size.

Our platform perhaps isn’t as well priced as a fund supermarket. So you can see that’s where people are tending to use it. And I have to say – I shouldn’t really be saying this but it’s quite helpful I think for advisers to have another rod to beat the platform with – if there are issues of service, then clearly there’s an option for the adviser. I think that’s absolutely appropriate to give a little bit more negotiating power to the adviser.

Q. How easy is it for platform providers to react to adviser demands?

GT: Easier than you might think. So often there’s a perception that wraps backed by life companies have been slower to react to adviser demands. I think that’s changing. Certainly at AXA Wealth, we have chosen to focus on our platform business and investment management solutions.

We do have the capability to extend our offering and respond to feedback from the market. Can we turn things round overnight? No, of course not. But we do listen to the adviser market.

With RDR looming, advisers are looking for more than just a bit of technology; they’re looking for support around how they run a sustainable profitable business in 2013 and beyond. And that’s where a company with the resources like ours can add value.