What to expect from your platform post-RDR

In the wake of RDR, platforms have an opportunity to consolidate their position by providing advisers with all the tools to succeed, says David White, head of Fidelity FundsNetwork.

The investment industry is inherently fast moving and the need to adapt effectively to changing conditions is often of critical importance. This has never been more so than over the past few weeks when we have witnessed extreme volatility in global stock markets.

The undoubted success of platforms since their introduction more than a decade ago is a clear testament to their ability to respond effectively to the changing needs of advisers. Today, once again, advisers and platforms are facing an environment of unprecedented upheaval and complexity owing in large part to the changing regulatory landscape.

Taking stock

With so many changes going on, now is a great time for both advisers and platforms to take stock of the situation and to reflect on the requirements for continued success in the coming 10 years.

For advisers, this calls for a continued focus on the needs of their clients and clarity on the kind of proposition that they would like to deliver. One of the key effects of the retail distribution review (RDR) will be the speeding up of the existing trend towards service fee models. This will mean we see a new type of commercial dynamic in which customers can more easily compare across different adviser firms, looking both at the type and quality of services on offer and the price to be paid for these.

In response to this, advisers will have to think more carefully about which types of customers they wish to attract, the services they want to offer to this group and how they are differentiated in these respects versus the competition.

For platforms on the other hand, but in a similar way, now is a time that calls for a single-minded focus on the needs of their own clients – the advisers. After all, it is important to remember that the fundamental reason why platforms exist in the first place is to serve the needs of the adviser market. Indeed, those that have really flourished have been the ones that have been most adept in this regard.

In the future too, it is reasonable to believe the most successful platforms will be those that do the best job in terms of meeting the changing needs of their customers.

Traditionally, one of the most important functions of platforms has been to provide various tools that help to lighten the administrative workload of advisers. This remains of critical importance today. Indeed, with the raft of regulatory changes coming down the line, it is quite likely these types of demands on advisers’ time will increase. For platforms then, a key objective and likely point of differentiation will be the quality of their tools and overall service.