Has Aviva got its platform back on track?

One platform that gets less coverage in the media than maybe its brand would suggest is the Aviva Platform.

To understand more about the Aviva Platform proposition AT8’s Mark Loosmore spoke to Anthony Rafferty, director of individual accumulation.

Aviva had a bit of a false start in the platform market place which may be why it has been slow to regain momentum and has not sought a high profile at this stage.

Back in 2004 it took a majority stake in Lifetime, publicly nailing its colours to the Lifetime Platform. On the strength of the Aviva backing many IFAs started to use this platform which in reality didn’t have the industrial strength to operate on a major scale.

Despite significant investment by Aviva into the Lifetime Platform the quality of the solution gained much criticism and Aviva was forced to admit in its annual accounts that maintaining service levels on its Lifetime Platform had proved challenging.

Aviva temporarily restricted access to the platform for new advisers to enable it to carry out the required rectification work but eventually called time on the project and withdrew the service. Despite the negative press coverage, it was a brave and probably correct decision. Aviva says that it tried to ensure that those advisers and customers that had used the Platform were not unreasonably disadvantaged.

In choosing to re-launch, Aviva could not afford for the work to be anything other than a fundamental rebuild. Its brand had been damaged and it had to get it right at the second attempt. As a result, a thorough due diligence process was put in place to select an alternative platform technology.

After one of the most detailed procurement processes in the market, in 2009 Aviva selected Bravura with the outsourced administration being managed by Scottish Friendly. The Aviva Platform was formally re-launched a year later in January 2010. Just over one year on, the relationship between Aviva and its chosen suppliers is very strong and all parties are delighted with the re-launched solution.

The key to the new solution has been a focused business proposition. Aviva is not trying to be a wrap for all investment business. It has targeted a market segment and created a proposition that is priced accordingly. The target is clearly the mass affluent segment up to the low end of high net worth. The proposition works for those with an accumulation of ISAs worth as little as £40,000 and for clients with portfolios of £250,000. The proposition does scale to higher levels but is priced out of the market at around the £2m mark.

Success story

With this strategy Aviva has been successful in becoming the second tier platform for several distribution firms who have a lead platform such as 7IM at the high end but need to support this with a mass market proposition. Their strategy could pay dividends as the top end of the market is fiercely fought over at the moment whereas the mass market promises good growth potential in the future.