Cheap and cheerful: IFAs list their platform must-haves

Making a selection from the ever-growing platform market is no mean feat.

With an increased regulatory focus as a result of the retail distribution review (RDR), picking your platform (or platforms) may feel a bit trickier.

IFAonline asked four advisers to list their platform must-haves...

Chris Wicks

Director, Bridgewater Financial Services

"We require an open architecture wrap that provides access to the institutional class funds we use in our portfolios. The platform also needs to provide access to the tax wrappers used by our clients, for example, pension, including drawdown, ISA, direct, offshore bond and regular savings.

"It needs to have good online functionality so that we can service our clients’ needs effectively. In practice, most of my time is taken up dealing with this, so the system needs to be easy-to-use and effective for what I want to do, such as fund switches, rebalancing and organising inbound and outbound payments.

"Costs are important, but so is service. We have a fairly cheap platform we use for clients with more basic requirements and a more expensive one (in most cases) for more complex clients."

Iain Wishart

Proprietor, Wishart Wealth Management

"For us, a platform must be able to hold most types of regulated investments, including model portfolios, and must offer funds at the institutional rate.

"Charges are important and must be reasonable. Where an IFA is already taking a fee, it is just too expensive for a platform to charge 0.5% or 1% simply to put investments onto it. Ongoing platform fees charged by the provider should not really exceed 0.25%.

"The notable casualties of Norwich Union Lifetime and Macquarie highlighted the importance of a platform’s profitability and sustainability. Re-registration from one platform to another is a real hassle to any IFA. With regards to their corporate structure, we do not like a platform or wrap provider to be multi-tied to a large high street bank."

John Lang

Director, Tower Hill Associates

"We will only recommend an established wrap platform or a new platform where senior personnel have significant direct platform development experience.

"A legal structure must be in place which totally ‘ringfences’ clients’ money and assets from the company and it must be authorised and regulated by the FSA. Smaller wrap platforms must also hold comprehensive professional indemnity insurance cover.

"There must be a comprehensive range of institutional, or net-of-commission whole of market, investments to support our New Model Investment Planning Process. This must include access to leading passive fund providers, the value/small cap tilting strategies offered by Dimensional and UK-listed ETFs.

"In the interests of full transparency and treating customers fairly, we require all charges to be unbundled and, consistent with our philosophy that charges are a cost drag on performance, we prefer those platforms with lower charges. All set-up charges should be no more than £750 and ongoing charges should be no more than 0.3% pa plus reasonable dealing, stockbroking and product charges.

"The ability to aggregate platform assets on a per-family basis in order to reduce charges is a requirement at all investment levels above our platform minimum of £150k.

The client must have online access to a portfolio view revalued daily and, in order to support adviser efficiency, the platform must offer model portfolio rebalancing and performance analysis at outset.

"A platform with “intelligent rebalancing” in place, which takes into account the client’s tax position (by allowing investor/investment preferences to be set), will be favoured as for most clients this will increase after tax returns."

Danny Cox

Head of advice, Hargreaves Lansdown

"The starting point for me is: does it have a sufficient choice of investments and tax wrappers to accommodate the client’s existing arrangements and provide solutions for their future aims and objectives?

"Other factors will include: financial strength, costs and charges, quality of service, ease-of-use, helpdesk support, online access, reporting, online dealing, investment research, calculators and planning tools."

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