The most critical debate for the advice profession right now

Despite the growth and maturity of the financial advice profession over the past 30 years and the last decade in particular, some product providers have not adjusted their strategy and approach to dealing with advice businesses.

While small and medium-sized enterprises (SMEs) still dominate the advice landscape, businesses are significantly bigger. There are fewer small practices, a burgeoning middle class, a growing number of super firms and an emerging category of advice platforms.

Advice platforms are acquiring and integrating SMEs at pace, and delivering value to clients, employees and shareholders by using their scale to build capability, streamline processes, and centralise data and services to remove friction and drive efficiencies.

Yet investment platforms treat advice businesses the same today as they did in the 2000s, with no real consideration for size and sophistication.

At the pointy end, the pricing might be sharper and the restaurants fancier, but the structure and terms of deals are largely the same. So are the expectations. Investment platforms expect super firms and advice platforms to act like SMEs and adhere to their arbitrary rules around portfolio administration, processing fees and sharing data.

This demonstrates a poor understanding of the profession’s changing structural dynamics.

A new client in town                                              

Investment platforms have different clients now. Many of their SME clients are partnering with advice platforms.

This trend is accelerating and requires product providers to have a different relationship with enterprise clients, in the same way that the growth and consolidation of Australia’s superannuation industry forced asset managers to adjust their approach to meet the evolving needs and objectives of institutional clients.

Mega super funds, also referred to as asset owners, don’t just invest in primary funds. They utilise a range of investment strategies and structures including discrete mandates, co-investments and special purpose vehicles.

While asset owners and asset managers are important business partners, there is a clear distinction and understanding of their different roles and responsibilities. In some areas, they compete with each other.

As super funds continue to grow, through a combination of inflows, investment performance and mergers, the conversations and relationships they have with their service providers evolve. Asset managers have had to become more innovative and flexible to meet the needs of institutional investors.

It’s not a competition

Investment platforms are currently investing heavily in advice tools in a bid to extend and expand their relationship with advice businesses.

A new report from SuitabilityHub and CoreData stated that platforms are aiding process improvements in the areas where advisers and their support staff commonly lose time, citing tasks such as the production of Statements of Advice, ongoing fee consent forms, and implementing multi-stage strategies.

A number have built recontribution and pension refresh processes that enable around 15 steps, including opening an account and rolling funds in, to be executed as a single step in 24-48 hours.  

According to the inaugural 2026 Adviser Platform Experience (Apex) Report, platforms are helping advice practices “unlock more growth”.

That claim is concerning.

While platforms can and have built financial planning tools, the question is, should they? Should a product provider be able to influence the advice process?

Similarly, while platforms and technology providers have historically collected and held client data, should they? Should they be able to store, own and restrict access to data.

While platforms are strongly positioned to create efficiencies in the implementation and administration of investment portfolios, the suggestion that their primary role is to make advisers more productive reeks of old-world thinking.

Historically, platforms have played a dominant role in driving efficiencies because SMEs were fragmented and didn’t have the capability, capacity or capital to invest in systems, processes and technology.

At the turn of the century, when investment platforms started to emerge as a force, there were many sole practitioners with one or two support staff. These businesses didn’t have the budget or capability to build advice tools to drive process improvements.

Investment platforms effectively paid them to use their product and started developing tools that influenced how they delivered advice.

But a reengineering of the financial services value chain since the Financial Services royal commission has led to the rise of very large, highly profitable and well capitalised advice platforms.

Fortunately for investors and advisers, SMEs have an alternative business partner that is client-first, understands advice and is investing heavily in systems and technology to improve and accelerate processes, enhance the client experience, and drive long-term growth.

Advice businesses, not product businesses, are best placed to own the advice process.

They are also best placed to support advisers in areas including client relationship management, client value proposition, risk management, automation and AI, cyber security and data analytics.   

This isn’t a competition over who has deeper pockets and better teams. It is an important boundary to draw because it has implications for the advice profession.

Ultimately, investment platforms exist to administer and implement portfolios, and their growth is dependent on inflows.

Advice businesses must own the advice process to ensure that product and advice remain separate. The separation of product and advice is crucial for managing conflicts of interest, ensuring compliance with the law and building consumer trust.

Paul Barrett is group chief executive at AZ NGA.