Single platform strategies but no exits

Twenty-five years ago a major report from Cerulli Associates predicted the number of platforms in Australia would be reduced to around five. That prediction proved well wide of the mark and there is little expectation that any significant players intend leaving the market.
The reason is simple and was outlined at Financial Newswire’s Advice, Wealth and Super: Rewired 2025 conference where Wealth Data principal, Colin Williams identified platforms as the most profitable segment of the financial services industry and the platform heavyweights themselves pointed to growth, not consolidation.
Colonial First State Wrap Transformation executive director, John Keating said that while consolidation is occurring within the platform sector, most of the action is with respect to the companies which own multiple platforms.
His comments came ahead of Westpac, a day later, confirming to the Australian Securities Exchange (ASX) that it will be moving to migrate clients on the Asgard platform to the BT Panorama, after having earlier successfully migrated clients from BT Wrap to Panorama.
Keating pointed to the complexities involved in consolidating platforms internally, and suggested it was even more complex when it involved the acquisition of external platforms.
AMP Limited’s Group Executive for Platforms, Edwina Maloney said there were a range of reasons that the Cerulli prediction had not played out, but not least was the fact that the all the platform businesses were very different and had done a good job of differentiating themselves in the market.
Maloney referenced recent Investment Trends research suggesting financial advisers were, on average, utilising 2.2 platforms, and said that anecdotally using two or three platforms felt “about right”.
“Eight or 19 is definitely not right,” she said.
Noting that numerous platforms have emerged from amidst financial planning licensees, Maloney said that scale would ultimately prove important in circumstances where price was a key determinant and the cost to serve needed to be low.
HUB 24 Executive, Group Strategy, Greg Hansen backed Maloney’s analysis, noting that migrating clients on platforms was a difficult exercise.
He said that what was evident was that consolidation is a factor with respect to financial advice licensees.
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