Advisers Shy Away From Platforms

Advisers shy away from main platforms

Fees, poor support to blame

By Kate Kachor Mon 08 Sep 2008

A large number of financial advisers have stopped using one main platform in favour of many, new industry data has found.

A large proportion of financial planners have admitted to dropping given retail platforms in the last 12 months, new data from researcher Investment Trends has found.

Thirty per cent of advisers have stopped using a platform in the last year, according to the 2008 Planner Technology survey.

"There has been an increase, and fairly dramatic numbers of advisers, saying they have stopped using platform x. So 30 per cent have actually ceased using a platform in the last 12 months," Investment Trends principal Mark Johnston told delegates at the Wraps, Platforms and Masterfunds conference last week.

"There is also a bit of an increase in the number of planners saying they want to change their main platform, which is a pretty dramatic step."

The main reasons advisers cited for leaving platforms are poor service and support, slow turnaround time on transactions and fees, he said.

As well as exiting selected platforms, there has also been a substantial rebound of advisers who admitted to using a number of other platforms alongside one main platform, according to Johnston.

In terms of potential threats, a number of advisers believe financial planning software will start to displace platforms in the near future.

"Advisers can definitely envisage a world where the planning software becomes the dominant tool." Johnston said.

Meanwhile, the number of advisers wanting to change their planning application has not really changed in the last 12 months, the survey found.

SMAs are Not Enough

Interesting article highlighting the lack of clarity between SMAs / Platforms etc. It would appear that this has begun to be a war of words rather than of service levels to clients.

Limited investment choice

By Vishal Teckchandani
Mon 08 Sep 2008

Using SMAs alone to build client portfolios does not provide enough asset class diversification.

Using only separately managed accounts (SMAs) to build clients' portfolios does not provide enough asset class diversification, according to BT Financial Group (BT) head of product and wrap solutions Craig Lawrenson.

"One aspect that a platform has, that I believe SMAs do not currently have, is investment choice," Lawrenson said at the Wraps, Platforms and Masterfunds conference last week.

"I do not think at this stage, advisers are able to establish a well-diversified client portfolio entirely using SMAs."

While SMAs provide clients with superior tax solutions to managed funds due to the direct ownership of stocks, platforms could be useful for accessing other products including term deposits, alternative assets and structured products.

Lawrenson said platforms should house SMAs, and they can benefit customers together.

"I do not see the SMA... being an alternative to the platform, and being able to manage and adminster those assets," he said.

Lawrenson's comments came after the year-long credit crunch sent global stock markets into bear territory, sparking high demand for term deposits, capital protected instruments and other cash products.

The catalyst for takeovers of SMAs will come when platforms seek to become full-service providers, Lawrenson said.