Platforms – Pre and Post RDR
Survival of the fittest
@ascentric_mike
FOR PROFESSIONAL ADVISER USE ONLY
Drivers to platform
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Investment choice – started by Fund Supermarkets
Asset consolidation – creating value
Business efficiencies, de-risking though consistency of
process
Reducing the cost of saving
Low cost faster internet access
Mobility of end customer
RDR
Pre RDR
Complex picture
Market offerings
Assets
Structured
Products –
VCT, ITs
Bonds
True Open Wraps
ETFs
Provider Platforms
Equities
Cash
Collectives
Fund
Supermarkets
ISA / GIA
Tax Wrappers
SIPP
Offshore
Bond
Onshore
Bond
Trustee
Pricing models - Bundled
Pays annual management charge of 1.50%
Private
Investor
IFA
Platform
Fund
Manager
Retains 0.75%
Rebates 0.25%
Pays 0.50%
commission
Pricing Models - Unbundled
Pays annual management charge of 1.50%
Private
Investor
IFA
Fund
Manager
Platform
Retains 0.75%
Pays 0.25%
fee
Where will
the FSA
land?
Pays 0.50%
Adviser fee
Rebates 0.75%
Cash
account
Operating models – Own Technology/Admin
Platform penetration to date
Investment Platform Study
2011 by Core Data
• 90.7% of those surveyed use a
platform
• Over 50% using 1 or 2 platforms
• In excess of 40% use them every day
• 20% of advisers likely to add a platform
in next 12 months
• Just over 16% on recurring fees
• 40% expect a rise in assets to main
platform
Commercial pressure
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Largely sales driven
businesses
Massive capital
expenditure
Just 4 profitable
platforms
Big brands fallen
Yet more new entrants
Unsustainable business
models?
Post RDR
Evolving Picture
Adviser charging B2B2C Collaboration Comparisons
Competition
D2C
Consolidation
Corporate Wrap
Integrations
DFM
Legacy Assets
Margins
Multi-platform propositions
New entrants Open architecture
Rebates
Investment
Pricing Profits
Re-registration
Service
Restricted
S t o c k b r o k i n g Technology
Important not to lose site of end client needs as market develops
Making sense of it all
Started the market
Strong brand
Control whole experience
Limited initial capability
Third party operating system
Rich content and capability
Traded on low pricing
Fewer integrations (apps)
Innovators
Struggled to innovate since
Less profitable model
Wide choice of services (apps)
Fund Supermarkets
Provider Wraps
Ascentric
Questions when debating platforms?
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What are you buying when you take on a platform?
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How flexible is the solution to meet my needs today and into the
future?
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What is the service operating model and performance – have you
been to see the “factory”?
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How can they demonstrate strength and sustainability?
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Do the costs represent value for my clients?
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Are the terms suited to my client segmentation?
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Is the product and investment choice sufficient?
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Does the provider have momentum behind them?