The direct to consumer platform market is “taking off” as the lines between D2C and adviser-led models blur, says The Platforum.
At a briefing today to coincide with its first-ever research into the D2C platform market, The Platforum says the industry now boasts more than £65bn in assets under administration with an estimated 2.5 million UK accounts.
"The D2C market has now developed to the stage there is no doubt it exists and it is undoubtedly important," says Lucian Camp of Lucian Camp Consulting and co-author of the research. "This is just taking off so let's get on with it."
Included in the rather loosely-defined D2C space are IFA-brand platforms, fund manager platforms and execution-only stockbrokers, along with several players operating behind the scenes. The largest players are Hargreaves Lansdown, Barclays and Fidelity.
The Platforum managing director Holly Mackay (pictured) says the market is set for further, significant growth.
She highlights an abundance of big brands - including the likes of Tesco, Asda, Virgin and Moneywise - who could potentially power the market to new levels of growth.
"There are all of these sites where people go for advice about money and surely it is just a matter of time before they start buying up products," she says. "It would be quite a natural development for them to go to the likes of Cofunds and ask for support."
"The market is moving quickly and lots of players who have not come to the party will do so," she says.
But Mackay stresses the rapidly expanding D2C platform space is complementary to the adviser-led platform model.
"People have previously said adviser platforms and direct outfits are separate but the lines are blurring," she says. "A lot of direct consumers also receive advice and we think the boundaries between adviser and D2C platforms will diminish. Advisers will need some form of execution-only platform in the future."
Cofunds, which is sponsoring The Platforum report, says it will cater to both the D2C and adviser space.
"We want to ensure we have a platform to fit both sides - this is about what the investor wants," says head of proposition Verona Smith. "An investor can do some things for themselves and let advisers do the rest and this is liberating for the consumer."
She adds whilst Cofunds has no plans to enter the space directly it will provide support for D2C propositions.
Research conducted by The Platforum suggests investors are increasingly craving execution-only services.
Why wouldn't an adviser seek to enhance his clients' protection?
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