Advisers vote with feet when platforms fail them

Mike Taylor

Managing Editor and Publisher

12 August 2022

Financial advisers are using more platforms than ever but price and utility remain the key drivers for those they select.

What is more, platforms will lose advisers when they do not provide adequate support.

That is the bottom line of the latest tranche of research from the Investment Trends Adviser Technology Needs Report which found that, on average, advisers are using three platforms – the highest number in 10 years.

And their use of multiple platforms is probably owed to the fact that their satisfaction levels with particular offerings have been in decline.

The Investment Trends report found that the per centage of new inflows by advisers through platforms decreased slightly to 71% on average, down from 76% in 2021, while the long-term trend remains stable with 73% expected in three years’ time.

However, the report noted that, this year, the use of multiple platforms had reached a 10-year record high average of 3, with advisers increasing the proportion of new business directed to their secondary platform at the expense of their main platform.

“The use of multiple platforms by advisers also means that platform integration with their planning software is also increasingly important,” the report analysis said. “In choosing a platform, advisers have responded that they continue to prioritise providers based on fees and charges and increasingly those who can support their need for efficiency (45%, up from 34% in 2021) and provide reliable technology (43%, up from 30% in 2021).”

“While the longer-term trend in net inflows is promising, the competition for adviser relationships is fierce in an already tightly contested platform space,” Investment Trends research director, Dougal Guild said. “It’s not surprising to see the increased average of the number of platforms used hitting a ten-year high given the prioritisation of efficiency and reliability by advisers now more than ever.”

Industry-wide, overall adviser satisfaction with platforms has fallen (67%, down from 72% in 2021), with advisers looking for more efficiency gains from their providers. Lack of support has become the leading reason for client attrition (34% of advisers stopped using a platform in the last 12 months) and advisers are calling for more focus on areas relating to administration accuracy and service, such as the contact centre staff’s technical knowledge, turnaround times for transactions, complaints handling and problem follow-up timeframes.

“In this highly competitive market, it is imperative that platforms are listening to the needs of advisers. With fees and capabilities becoming more consistent across providers, advisers are placing an increasing focus on platform reliability and quality of service support.,” Guild said.