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The Evolving Role of Platforms in the Post-RDR Era

This article discusses the changing landscape of platform services post-RDR, analyzing market trends, challenges, and potential future developments. It covers key data on UK platforms, IFA and D2C platforms, average customer profiles, regulatory impacts, and industry concerns. The text delves into topics such as platform due diligence, fee structures, independence criteria, and client suitability considerations in the context of the RDR. The comprehensive overview aims to assist advisers in navigating the evolving platform space effectively.

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The Evolving Role of Platforms in the Post-RDR Era

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  1. “What Role Will Platforms Play in the Post-RDR World?” – February 2012 Emma Napier, Head of Adviser Relations, The Platforum

  2. So, what’s going on?!

  3. UK Platforms – Q3 2011 • £168bn as of September 2011* • 2.4% increase in AUA from Q2 2011 to Q3 2011 (against FTSE fall of 14.4%) • We did anticipate platform AUA would increase to at least £320bn by 31 Dec 2012 – current growth challenges this assumption  The Platforum 2011 *includes new entrant AJ Bell reporting £11.1bn AUA

  4. Table of IFA Platforms by Size

  5. Current IFA Platform Providers • 25 platforms today • With 4+ more confirmed future entrants

  6. It’s not just adviser platforms on the rise..

  7. A profile of the average D2C customer • Total market AUA = £64.9bn as at September 2010 • Estimated 2.5 million active D2C customers in the UK today • 1 million IFA + fund manager accounts • Hargreaves Lansdown 337,000 customers = 28.5% market share • According to Compeer, as at 2009 there were 1.9 million XO nominee accounts with stockbrokers • Up to 4 million client accounts with execution-only stockbrokers today • Average account size across all D2C platforms is £25,288 • Average age of D2C customer is 57

  8. CP10/29 • No payments from product providers to advisers • No more cash rebates • Proposed unit rebates • Increased disclosure and transparency • An independent adviser will need to be able to chose from all investment types.... • But will the term independent retain currency moving forward?

  9. And • Suitability • Thematic Review (DP 10/2) • RMAR • Platform due diligence How can I compare charges? How often should we do due diligence? Can I use just one platform and still be independent?

  10. What’s bothering IFAs today? • The RDR – first country to try and move advisers to fees in a bull market • Increased qualifications • Increased regulation • Use of risk profilers and portfolio modelling tools • Platform selection and due diligence • Client segmentation • Lack of clarity • VAT • .....very busy and pushed for time

  11. Q1 Q2 Q3

  12. Most advisers are using 3 platforms today

  13. Happy advisers use one platform

  14. What’s bothering IFAs?

  15. Pretty much everything….! • The regulator and the RDR - Platform selection – can I use just one? - Platform due diligence - Banning commission and moving to fees - Using portfolio tools/client suitability • VAT • Independence

  16. Our Leaderboard and evaluation

  17. The PlatforumLeaderboard for Q3 2011

  18. How we calculate The Platforum Leaderboard

  19. PAT – Platform Analysis Tool

  20. The Future?

  21. FSA Platforms (bundled and unbundled) IFAs • Corporate • D2C • Back office • Funds • Platforms • Adviser charging • Providers • Clean share price • Tiered charging • Transparency • Rebates • Reregistration

  22. Thanks and any questions? Emma Napier emma@theplatforum.comHead of Adviser Relations, The Platforum

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