Expert: Andrew Back, Multrees. Moderator: Ben Wright
Headlines:
- Technology is becoming more and more important in order for advisers to stay relevant in the current world
- Most advisers use 3-4 investment platforms, but often have to deal with up to 10 due to legacy investments
Context:
From the group most advisers had either invested in technology recently or were looking to make technology investments soon.
When it comes to being independent, all advisers attending the session were independent and planned to remain independent for the foreseeable future.
Some independent advisers could be wary of putting their name on products or services which they don’t have total control over. Two of the advisers in the room discussed that they had previously worked on implementing white labelled platforms but decided to move away from them to take away contamination from their name in case of errors/service issues and to promote their independent status by not using anything which looks like it was tied to themselves.
The average number of platforms used was 3.5, however some said that they had legacy clients on other platforms, making up to 11 in total which had to be managed. Most advisers in the room had a centralised investment proposition. There was some debate on how many platforms are needed to be independent and most agreed that a platform was simply an online place to trade and hold investment, however the view that multiple platforms needed to be used couldn’t be shaken for most.
One advisory commented on the massive efficiency and client experience benefits of using a single platform for most clients. They felt that a CIP with one platform at the centre and maybe one other for complex cases would meet the regulatory requirements. This view was shared by others in the room, however not by the majority of advisers.
Key Takeaways:
- A clearer definition from the regulator on how many platforms need to be used to maintain independence would be useful
- As a platform is not a retail investment product, but a related service, if a single platform could be used for the majority of clients, advisers may be able to gain efficiencies within their businesses
- At present most advisers in the room didn’t think that this would meet the standards for independent financial advice
