The number of advisers using multiple platforms is on the rise. Henry Brennan finds out what's behind the shift away from relying on a single investment platform…
Advisers who choose to stick with a single investment platform seem to be a dying breed, according to Aviva's latest barometer survey.
The insurer found the number of advisers using a single platform dropped from 25% in March to just 14% in September this year. This is in contrast to a significant increase in advisers choose to use three or more.
In March, 16% were actively using three platforms but by September, it had risen to 25%. Similar trends are evident in the number of advisers using four or more.
But what's driving the shift to varied platform use: are advisers worried about bringing their independent status into question or are there other contributing factors?
What’s driving the move to multi-platform use?
A thematic review published by the Financial Conduct Authority (FCA) in July questioned the ability of advisers to label themselves independent if their business was primarily concentrated on one platform. The FCA stated that it is possible, though unlikely.
In the context of the Aviva survey, which showed almost no change in the number of advisers who identify as independent between March and September, is this what has sparked a migration from single-platform use?
Yellowtail Financial Planning managing director Dennis Hall continues to primarily concentrate the majority of business on one platform but said the FCA's review may have unnerved firms with dissimilar client bases.
He said: "I think a lot of people have been scared by the reports that the FCA would be questioning someone's independence if they only used one platform. If you have got a large range of client types with different values, there may be merit in looking at more than one. If you are a firm like ours where most clients are fairly similar in terms of wealth, needs and the service they want from us, it is different. We feel we have selected the best proposition for them."
Another contributing factor behind this trend could be related to platforms becoming increasingly specific about their target market. The more specialised platforms become, the more incentivised advisers are to allocate their client base accordingly.
Aviva head of platform proposition Phil Ralli said: "When we first started talking about moving to the mid-market, there was a body of opinion that said it would be more helpful if more platforms can be more specific about how they fit the picture. There is some evidence of that. Some of the recent pricing moves seem to be aiming at very specific types of client at particular levels of investable assets.
"There is gradually a clarification across platforms to start to be a bit more explicit about where they fit into the particular picture."
Ascentric managing director Hugo Thorman said the trend may be more a reflection of the difficulties associated with migrating client assets and that it may start to actually reverse as the standards around re-registration start to improve.
He said: "Advisers feel, as the regulator expects them to, that it is their job to consider carefully their use of platforms and to revisit that decision. As they get into that, they perhaps find that their current platform is not doing what they want it to. That is when they start to use a new platform.
"They can't stop using the old ones straightaway and, at the moment, it is quite difficult to move clients. As that becomes easier, the number of platforms being actively used will reduce."
So while it seems that the FCA might have sparked this trend, what might be sustaining it are the difficulties associated with transferring assets, something the regulator has indicated it will be taking a closer look at in the near future.
Alzheimer’s is the most common cause of dementia
Total of 72 accredited firms
23% fall since Q1
Achievements, charity work and other happy snippets
Including advice firm Chadkirk WM