Choices, choices... when is an off-platform solution best?

Ten leading platform commentators were locked in a room recently to debate the future of the market. In the second of a three-part special in Professional Adviser, the team asks: In a wrap-heavy world, is there a future for off-platform solutions?

Ray Chinn of SIPP provider, LV=, was ideally placed to kick off the discussion about the role of off-platform products.

Without a platform of its own, Chinn recognises that LV=needed to focus on its products and be confident in their reach, appeal and value.

Once LV= has confidence on its product strategy, it can then have the confidence to work with independent platforms like Novia and Nucleus as well as systems houses to integrate to its propositions.

“The challenge for us”, Chinn explained “is when an adviser says: ‘I realise what value you provide in the SIPP space but need you to work with all these other products and services in our value proposition’, we are not left saying ‘Whoops sorry can’t do that’.”

Off-platform future

Mark Locke of Aegon said he felt that for some time off-platform products will exist in the same way corner shops continue to exist alongside the big food supermarkets.

“For the foreseeable future there will be a role for off-platform products,” he said. “These can and will exist, providing adviser and consumer choice. Ultimately this may lead to product providers becoming more niche in terms of product strategy, but this in turn is no bad thing and can promote innovation, competition and better customer value.”

Graham Bentley of Skandia said he imagined that, in ten years, looking back at a conversation about off-platform versus on-platform products, we might find it quite confusing, as roles are changing in the industry.

“Skandia used to be a life company that has a platform, and is now a platform that has a life company. It also has a parent that is a life company.”

Bentley continued to state that being owned by a life company allows the organisation to innovate and change a great deal from a product point of view, because you can use the balance sheet.

A lot of things not usually associated with a platform – protection, annuities or guaranteed products – come into play.

Paul Boston of Novia pointed out that Solvency II does place constraints on this, which Bentley accepted but said there is nothing at all that prevents a wider range of products being sold.

He said he expects this to happen either by self-manufactured products where the platforms are owned by product providers, or through partnerships.