“Everybody is striving to improve their platform, so I don’t see [the levels of functionality] widening,” Clancy says.
Macquarie’s Delaney is unconvinced of any major movement, despite the evident ambition by non-dominant competitors to play with the big boys.
“Whether or not anything that’s out there at the moment or coming to market actually meets that criteria, I’m not sure,” he says.
“There’s no doubt that it’s increasingly important to have access to scale and distribution in running a platform. There’s a fairly high cost and also exposure to a changing regulatory environment in running a platform, so it’s a complex business.
“But ultimately, innovation will continue to evolve and there’ll be winners and losers from that.”
Burgess says we will see “more consolidation of the platform market where those with scale and [who] can afford to invest and develop and innovate will succeed over and above the rest”.
Katrina Warren, senior manager of platform solutions at Bendigo Wealth, says new platforms should not be overlooked as customer demand will dictate who belongs in this space.
“Essentially, [what] we were able to identify was quite a substantial amount of latent demand from our customer base as they were demanding additional wealth offerings.”
This resulted in the delivery of Trinity3 last November, causing other players to sit up and take notice of a new player who is “committed to the platform space 100 per cent”.
“There seems to be plenty of room for competition and I think we’ve seen that in the last couple of years with new-age platform offers coming into the space – OneVue, Hub24 et cetera,” Warren says.
“That’s really been driven by a couple of things: the beauty of being able to start from a blank page and to leverage new technologies.
“And we all understand that technology is like that; no sooner have you bought the latest and greatest than there’s something better coming.
“A lot of these large platforms are built on very old systems now and that slows them down in terms of their development and it also impacts costs overall,” she says.
“Having the benefit of a blank page, we’ve built our platform to be totally in tune with where the climate is today. We’re 100 per cent FoFA-friendly so our platform has complete transparency, stands up on its own; we don’t rely on any rebate or volume-based payments…we’re in a very strong position to compete in a new world.”
Warren says financial advisers using Trinity3 have found it answers their need for more choice.
“We’ve definitely had a higher degree of interest from those with their own AFSL or certainly smaller boutique groups.
“The advisers working for some of the majors don’t tend to do their own research in this space; they tend to rely on the head office of their dealership to do that,” she says.
“As these new offerings enter the market, advisers need to have a look, get past the hype and find out whether their platform is really living up to its promises.”
A TREND TOWARDS INDEPENDENCE
Varlamos says part of an adviser’s value proposition is that they need to show their clients they are providing a level of value that’s commensurate with the amount of money being charged each year.
“And what’s the foundation upon which an adviser needs to rest his proposition? [It’s] that ‘I actually act in your interest as your adviser, not a salesperson for a bank’. That means he needs independence.
“The trend is towards independence,” he says.
“That’s what the Future of Financial Advice reforms [are]. They’re not going to create the desire for independence, but they’ll exacerbate the underlying trend that is already there, where individual consumers want to see independence on the part of their adviser.”
He says dealer groups will “see a lot more non-‘Big Five’ institutions [gaining] more control over their platform offering”.
As a result, Varlamos says it will create market disaggregation where aligned advisers will be prompted to start looking for something different.
PLANNERS ON ONE SINGLE PLATFORM
While it’s not feasible for an adviser to run on 10 different platforms, it may be the case that one single platform may not be the answer either.
Recep Peker, analyst at Investment Trends, says there’s been a steady consolidation in the number of platforms advisers use.
“In 2010 planners used 2.9 platforms on average – a decrease from 3.5 platforms on average for 2009, according to the findings of our October 2010 “Planner Technology Report”, based on a survey of over 1600 financial planners.”
Delaney says: “In an ideal world, advisers would have one platform. Practically, however, they’re going to inherit clients who might be on another existing platform, and there might not be a case to move the client.”
AXA’s Burgess says this is not a new development.
“Advisers want to use a smaller number of platforms,” he says.
“They’re looking for options that mean they can consolidate onto fewer platforms in their business. So if you’re not quite up to speed or as competitive as the leading pack, you’re losing out there.
“In fact, some advisers are looking really to get on one main platform in their practice with maybe a kind of secondary platform that they would use in certain circumstances – maybe a specialist platform like an SMA platform.
“Many advisers are still looking for that single platform that can form the bedrock of their wealth management business within their practice.”
