Just what is the agenda of the UK's 'first representative platform committee'? wonders Dave Ferguson, chief executive of Nucleus Financial Group
Fresh from last month's discussion about the ABI, it seems we now have another trade body with which to contend. Probably later than expected, and broadly in keeping with the hot topic of the day, September saw the birth of the UK's 'first representative platform committee'.
I'm sure most readers will already be aware of this, er, initiative and while I don't want to go over old ground I can't help but feel the group's objectives are no clearer now than a month or so ago. It also seems a little strange that a group of companies not exactly known for their shared agenda should join forces to in this way.
Not only that but I can't be anything but stunned that the group has chosen not to invite the UK's leading wrap platform on board and also appears to have completely overlooked the true representatives in the platform market, the adviser community!
Lack of transparency
My first observation is that, despite the liberal use of words such as fairness, accessibility, opportunity and partnership, I can see no reference whatsoever to transparency.
Now, call me old-fashioned but it feels to me that if the participants were just willing to open up a little bit on where the various underlying margins lie - in other words, be transparent - then all of the good warm expressions above would arise naturally through market forces.
After all, what is there to hide? Could it just be that the increased squeezing of asset managers using advisers' clients' money is a business model under threat? Is there a fear that perhaps the adviser community is likely to become a little too powerful once the commoditisation of platform technology becomes more apparent? I guess time will tell.
I note the committee plans to ensure the needs of customers and advisers are at the heart of the group's activity. Now, I studied actuarial maths rather than economics but surely this intention is simply a restatement of the most basic laws of supply and demand?
Without wishing to rant all the way through this piece, one area in which I can see some value emerging is that of re-registration of legacy assets. Having said that, I am not certain how a committee is going to help.
All that is needed here is a change of corporate stance from some platforms - open yourselves up and be as willing to re-register out as you are to re-register in.
Don't put roadblocks in the way - in fact, why not just treat customers fairly? I find it quite bizarre that at least two of the participants have been rather public in their refusal to permit re-registration out and then feel it is appropriate to lead the debate on how to make this process more straightforward.
A free market
Ultimately, platforms and wraps will change the market forever - and not because a bunch of large providers thought it a good idea. Fund supermarkets have been an important catalyst for change but the end game must be transparent, open architecture wrap, because this is what advisers demand. Anything less than this and a platform is guilty of encroaching on the adviser's area of expertise.
The day a platform charges fund groups for shelf space is pretty much the same day the platform thinks it can do a better job than the intermediary. Let us have a market in which fund groups are free to offer their skills at whatever price they deem appropriate, unconstrained by matters such as access.
That way we will see a proper market in asset management emerge, which will weed out many of the underperformers and we can take another step on the road to having a retail financial services market that is both mature and worthy of being held up as a world leader.
As a final observation - and I really can't let this go - one of the companies involved recently felt the need to reveal in an online article that email can be really helpful to advisers. While not challenging this insight in the least, I cannot help think that if the committee is really going to deliver for advisers it probably needs to set its sights a little higher.
More than half of people over the age of 55 see financial security as a top priority in retirement, yet a third allocate more time to buying a new car, research from Legal & General (L&G) has found.
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Alongside Barrett, Boston, Hopkins and Thorman on 17 October