The abolition of rebates and pressure on margins could double the break-even point for platforms from £20bn assets under administration to £40bn resulting in major market consolidation, according to Deloitte.
A paper from the firm said while assets under administration on intermediary platforms are estimated to grow significantly - from about £200bn to £600bn in 2018 - the number of operators would shrink due to pressure on fees.
The paper said: "Assuming similar levels of industry concentration, less than ten platforms are likely to be profitable in 2018, indicating a major consolidation wave."At present the market is dominated by a handful of players.
Deloitte said Cofunds, Skandia and FundsNetwork dominate, while vertically integrated providers such as Standard Life and Axa are continuing to invest in improving their service offering.
It added there are many other niche players - resulting in about 30 total market participants.
The report said: "With pressure on margins across the value chain and platform revates being abolished, platform fees might be squeezed from 30bps to 20bps, moving to a break-even point significantly up from £20bn to £40bn. With only £600bn to divide, the results in a maximum of 15 companies breaking even.
"With the five biggest platforms accounting for about 70% of the market, it is likely that there will be only eight to ten profitable platforms by 2018."
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