Advisers seek to rationalise number of platforms in a move towards mass market

  • Over half (59%) say they want to reduce the number of platforms they use
  • Factors dictating platform choice have changed over the last three years, with ease of integration now topping the list

New research carried out by Aviva1 shows a continuing trend of advisers moving towards using fewer platforms.  In 2023, none of the advisers surveyed reported using more than 5 platforms, with most (70%) using 2 or 3. Three years ago2, 11% of advisers used more than 5, and 58% used 2 or 3.

Two-thirds (65%) of advisers say their firm has several platforms available and they can choose which one they use, and 64% say they tend to use one main platform. These levels are broadly similar to what was found in 2020 where the corresponding figures were 64% and 61%. It would seem, therefore, that using fewer is down to the personal choice of advisers, rather than company policy. However, 59% agree that the  longer-term aim is for firms to reduce the number of platforms they use.

Al Ward, Head of Aviva Adviser Platform, said : “The move towards using fewer platforms is understandable in a maturing market, as advisers become accustomed to the way their preferred platform works, and the market itself is seeing more consolidation and standardized tech. It’s important, however, that advisers keep in mind the individual needs of their clients, some of whom might be better served on one platform over another. In the drive to provide good consumer outcomes, it’s a good idea to have options.”

Factors which impact advisers’ choice of platform have changed since 2020, when the top 3 were overall tech reliability (88%), followed by choice of funds available (86%) and value for money (85%). These have been replaced as the top 3 in 2023 by ease of integration (57%), followed by range of retirement solutions (56%) and ability to build bespoke portfolios (55%).

The changing requirements reflect the 57% of advisers who agree that difficulty of systems integration prevents them from doing their job effectively. This is almost twice as high as in 2020, where 30% reported the same issue. Similarly, more than twice the number of advisers currently say that platform admin prevents them from doing their job properly – 55% now agree, compared with 22% in 2020.

In what may make it harder to support ‘good outcomes’,  following the implementation of Consumer Duty in July, over half of advisers (56%) say that it’s too difficult to switch clients  – again, substantially up on 2020, where only a quarter (25%) agreed.

In a further shift,  which does have positive implications for the Consumer Duty, only 4% of advisers now say they don’t segment their customer base, compared with 36% in 2020.  Client value remains the most common method of segmentation.

At the same time, there has been a significant increase in the value of assets a client must have, before advisers will take them on. In 2020, 60% of advisers said there was no lower limit on the value of a client, but this has more than halved to 22% now.

Along with this, advisers now require more value before taking on clients – 40% require a client value of £30K – 50K, compared with 11% in 2020,  and 28% require it to be £50K - £75K (compared with 5%).

However, fewer advisers are now reporting that they require very high levels of wealth before they take on a new client, with 7% currently asking for a minimum value of £75K or over, compared with 16% doing the same in 2020.  

Higher minimum levels, and the change away from requiring very high asset levels suggests a move towards mass affluent clients.

Al Ward, Aviva’s Head of Adviser Platform, comments : “As client needs evolve, so advisers’ requirements of their platform change too. Data integration has long been an issue for advisers, and the fact that over half of them believe it stops them effectively doing their job bears this out. Advisers also report that administration is more onerous now than in the past, and this has impacted the ease of switching customers away from main platforms.  Advisers and platform providers need to work together to ensure that these difficulties do not get in the way of delivering the best outcomes for customers, especially in the light of our obligations under the Consumer Duty. It is good news, however, that more advisers are now using customer segmentation with their client base, which means they will be better prepared to define target markets, an important Consumer Duty requirement.”

1 Research carried out by Censuswide, 10th – 17th February 2023. 1003 Respondents who work in the financial services sector. Work at a company where wealth or financial advice is the main line of business. Main role: adviser, paraplanner, admin, business principal or business development. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles.

2 Aviva research carried out August 2020 with 731 Wealth advisers.