Life companies are beginning to count the cost of creating full wrap platforms which few advisers are ready to use, Skandia claims.
Skandia believes the recent announcement by Friends Provident and the problems encountered by Norwich Union’s Lifetime platform shows how competitive the UK platform market has become.
It says traditional life companies have misjudged demand for wrap and have also mistakenly tired to adapt to an open architecture model by taking Australian or New Zealand expertise.
Skandia UK chief executive Brett Williams says full wrap services will be in demand in the future, but in the meantime the platform business to focus on the needs of advisers today will come out victorious.
“The platform model is accepted as the way the industry must go, especially to support the post Retail Distribution Review world, but traditional life companies have misjudged adviser demand for full wrap services,” he says.
“They have focused too much on buying in wrap services from overseas with no regard for what financial advisers actually want. Advisers will not be dictated to in this fashion.”
However, AXA Distribution Services marketing head Ian Thomas says the winners will emerge over the coming years, not months.
“We are still in the very early phase of platform evolution in the UK, only £80bn of the approximately £3trn to £4trn wealth management market is currently on platforms,” he says.
“A strong offer, based on real advisers’ current needs but also offering support for, and a clear migration path to, emerging business models is the ideal solution.
“The successful platforms will also need to be able to commit significant resources over a long period of time to retain a competitive offer.”
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