Aviva is set to merge its off- and on-platform assets, with others looking to do the same. Is defining a platform harder than it seems?
Aviva’s wrap platform hit £1bn of assets under administration in September – not bad, considering it launched in 2010. But compared to Cofunds, which recently surpassed £50bn, the insurer has a lot of catching up to do.
So, Aviva has hit on a novel solution: merge it with off-platform business to form one online ‘portal’. The move, expected to be officially announced on 11 April, will aim to streamline the service provided to advisers.
Using a single log-in, advisers will be able to see clients on the firm’s Bravura-powered wrap, as well as those currently accessed through the Aviva for Advisers site, in off-platform life and pension products.
Welcome to the portal
But it will also help accelerate wrap growth, which still lags some way behind off-platform assets in terms of scale.
Aviva’s £1bn platform is dwarfed by UK life assets of £81.4bn, according to annual accounts filed last week. Many other life companies are in similar situations.
Blurring the lines
Standard Life’s platform is one of the UK’s largest, with assets under administration recently topping £14bn. Compare that to £79.8bn in total UK retail, however, and it is easy to see why life companies are beginning to blur the boundaries.
“Try defining a platform,” said Nick Elphick, head of Axa Wealth’s off-platform business.
“When people say they have assets ‘on-platform’, arguably every IT project is a platform. We’ve got two: Embassy [for bond business] and [wrap platform] Elevate. I’m sure if you look at Aviva they’ve got more than two.
“I would see convergence at some point in the future with the ability to look across both.”
Part of the reason Axa may follow Aviva in going “on-portal” is the realisation advisers are demanding more for their off-platform clients.
Bond business in 2013 has trebled at Axa compared with the same period last year, as the firm capitalises on being one the few left to offer adviser charging off-platform.
“IFAs are showing a great deal of interest in what we would call old-fashioned life and pensions products,” Elphick said.
“For the last few years since we launched Elevate it’s fair to say we’ve been concentrating on that. It will continue to grow but as we were doing RDR work we looked at what we had in the off-platform space, and realised it was still good.”
Cost also plays a factor, said Michelle Cracknell, commercial director at Lift Financial.
“As an industry we are encouraging clients to transact through platforms, even when it is not in the client’s best interests,” she said.
A major reason cited for moving clients to platforms is the decreased administration burden.
“Only advisers and providers benefit from streamlined admin,” Cracknell said – but life companies are increasingly looking to improve legacy process historically marred by reams of paper.
“Currently wet signatures are the way we have to go,” Elphick admitted, “although we have a few thoughts going forward. But even off-platform you can quote, switch and evaluate online.”
That distinction, however, may soon be irrelevant.
>> Find out more
For more platform news and views click here
Consider the fate of Blockbuster
From Allen & Overy
More focus on global equities
PA360 – 24 April 2018
Plans to hire more advisers