Advisers will be unwilling to use fewer platforms due to the belief it won’t be in clients’ best interests, according to former Investment Trends researcher and SuitabilityHub founder Recep Peker.

While some wrap platforms are still focused on being able to cater to all client segments, Peker says, the reality is advisers prefer using multiple platforms and believe it gives them the best shot of meeting their fiduciary obligations to clients.

“When we interview advisers or have conversations with them there’s a big reluctance to have just one platform,” Peker tells Professional Planner.

“They think from a best interest [duty] perspective they will never be able to justify everything being with one platform provider. Of course, there is some who believe one is enough.”

Sspecialist players like HUB24, Netwealth, Praemium and DASH have taken on significant inflows since Wexit – when the banks left wealth management – and bank-aligned advisers were not mandated by a particular platform.

Certain platform providers are targeting particular parts of the market with their own strengths.  Peker pointed to AMP’s North being focused on the retirement and pre-retirement space, while Mason Stevens is better suited to high-net-worth clients because of its wholesale investment offering as a pair of examples.

“It really depends on what client the adviser wants to service and what tools are needed within the business to serve those clients,” Peker says.

“One of the things is there has been immense competition between the platforms, they’re competing by adding new functionality. For some platforms their idea is to get richer in functionality while others are recognising they don’t need every functionality under the sun [and are instead doing] a certain segment of the market really well.”

The fight over fees

Peker says administration fees are often the core focus for establishing the value of a platform service, but this is only half the picture.

“The way platforms have structured their fees – between fixed fees and tiered fees – makes a very big difference depending on how many clients or accounts that are linked together,” Peker says.

“Some platforms might look quite cheap for one or two clients or accounts, but if you have a bigger family or a structure where you have two family members and an SMSF and there’s multiple accounts across them, the cost can really vary as well.”

Peker says the challenge for advisers is to balance the features in a service versus the cost to the client.

“It’s a challenge for advisers to justify or articulate why should they be using the product with the appropriate features as opposed to the one with the cheaper features,” Peker says.