“What Role Will Platforms Play in the Post-RDR World?” – February 2012
Emma Napier, Head of Adviser Relations, The Platforum
So, what’s going on?!
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
Platform name
Skandia
Cofunds
FundsNetwork
Transact
Standard Life
SEI
Seven IM
Ascentric
Alliance Trust
Elevate
Nucleus
Raymond James
Date of Launch
Jul-07
Jan-01
Jan-00
Oct-00
May-06
April-07
Sept-04
Aug-06
Jun-05
Nov-08
Dec-06
Jan-01
AUA £bn (30 Sep 2011) % Change +/37.02
-7.55%
33.42
0.66%
32.91
-11.05%
10.65
0.00%
10.58
-1.71%
9.55
0.53%
3.60
0.00%
3.33
1.47%
3.24
-6.64%
3.08
6.09%
3.03
3.60%
2.38
-8.51%
5
Current IFA Platform Providers
• 25 platforms today
• With 4+ more confirmed future entrants
It’s not just adviser platforms on the rise..
A profile of the average D2C customer
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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
CP10/29
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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?
And
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Suitability
Thematic Review (DP 10/2)
RMAR
Platform due diligence
How can I compare
charges?
Can I use just one
platform and still be
independent?
How often
should we do
due diligence?
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
Q1
Q2
Fund pi cker
Q2
Q3
Q4 Q3
33.8
37.2
30.7
20
18.4
16
DFM (3rd pa rty)
10.9
6.9
10.4
Model Portfol i os
35.3
37.3
41.4
0
0.1
1.5
MM
DIFs
Now
41.4 43
in 6 months
30.7
25.1
16.0 16.4
14.6
10.4
1.5
Fund picker
MM
DFM (3rd party)
Model
Portfolios
0.9
DIFs
Most advisers are using 3 platforms today
Happy advisers use one platform
BDM Support
Customer Service
Ease of Doing Business
General Web Usability
Value for fees charged
General opinion
Adviser using one
platform
55%
80%
82%
78%
82%
73%
Adviser using three or more
platforms
36%
39%
49%
45%
44%
45%
What’s bothering IFAs?
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
Our Leaderboard and evaluation
The Platforum Leaderboard for Q3 2011
How we calculate The Platforum Leaderboard
PAT – Platform Analysis Tool
The Future?
FSA
IFAs
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Corporate
D2C
Back office
Funds
Platforms
Adviser charging
Providers
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Platforms (bundled
and unbundled)
Clean share price
Tiered charging
Transparency
Rebates
Reregistration
Thanks and any questions?
Emma Napier emma@theplatforum.com
Head of Adviser Relations, The Platforum