“ what role will platforms play in the post-rdr world?” – february 2012 emma napier, head of...
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“What Role Will Platforms Play in the Post-RDR World?” – February 2012
Emma Napier, Head of Adviser Relations, The Platforum
So, what’s going on?!
UK Platforms – Q3 2011
• £168bn as of September 2011*
• 2.4% increase in AUA from Q2 2011 to Q3 2011 (against FTSE fall of 14.4%)
• We did anticipate platform AUA would increase to at least £320bn by 31 Dec 2012 – current growth challenges this assumption
The Platforum 2011
4*includes new entrant AJ Bell reporting £11.1bn AUA
Table of IFA Platforms by Size
Platform name Date of Launch AUA £bn (30 Sep 2011) % Change +/-Skandia Jul-07 37.02 -7.55%Cofunds Jan-01 33.42 0.66%FundsNetwork Jan-00 32.91 -11.05%Transact Oct-00 10.65 0.00%Standard Life May-06 10.58 -1.71%SEI April-07 9.55 0.53%Seven IM Sept-04 3.60 0.00%Ascentric Aug-06 3.33 1.47%Alliance Trust Jun-05 3.24 -6.64%Elevate Nov-08 3.08 6.09%Nucleus Dec-06 3.03 3.60%Raymond James Jan-01 2.38 -8.51%
5
Current IFA Platform Providers
• 25 platforms today
• With 4+ more confirmed future entrants
It’s not just adviser platforms on the rise..
A profile of the average D2C customer
• Total market AUA = £64.9bn as at September 2010 • Estimated 2.5 million active D2C customers in the UK today• 1 million IFA + fund manager accounts • Hargreaves Lansdown 337,000 customers = 28.5% market
share• According to Compeer, as at 2009 there were 1.9 million XO
nominee accounts with stockbrokers• Up to 4 million client accounts with execution-only
stockbrokers today• Average account size across all D2C platforms is £25,288• Average age of D2C customer is 57
CP10/29
•No payments from product providers to advisers•No more cash rebates•Proposed unit rebates•Increased disclosure and transparency•An independent adviser will need to be able to chose from all investment types....•But will the term independent retain currency moving forward?
And
• Suitability • Thematic Review (DP 10/2) • RMAR • Platform due diligence
Can I use just one platform and still be independent?
How often should we do due diligence?
How can I compare charges?
What’s bothering IFAs today?
•The RDR – first country to try and move advisers to fees in a bull market•Increased qualifications•Increased regulation•Use of risk profilers and portfolio modelling tools•Platform selection and due diligence •Client segmentation•Lack of clarity •VAT•.....very busy and pushed for time
Q2 Q3 Q4Fund picker 33.8 37.2 30.7
MM 20 18.4 16
DFM (3rd party) 10.9 6.9 10.4
Model Portfol ios 35.3 37.3 41.4
DIFs 0 0.1 1.5
30.7
16.0
10.4
41.4
1.5
25.1
16.4 14.6
43
0.9
Fund picker MM DFM (3rd party) Model Portfolios
DIFs
Now in 6 months
Q1 Q2 Q3
Most advisers are using 3 platforms today
Happy advisers use one platform
Adviser using one platform
BDM Support 55%Customer Service 80%Ease of Doing Business 82%General Web Usability 78%Value for fees charged 82% General opinion 73%
Adviser using three or more platforms36% 39%49%45%44%45%
What’s bothering IFAs?
• The regulator and the RDR
- Platform selection – can I use just one?- Platform due diligence- Banning commission and moving to fees- Using portfolio tools/client suitability
• VAT
• Independence
Pretty much everything….!
Our Leaderboard and evaluation
The Platforum Leaderboard for Q3 2011
How we calculate The Platforum Leaderboard
PAT – Platform Analysis Tool
The Future?
FSA
IFAs• Corporate• D2C• Back office• Funds• Platforms• Adviser charging• Providers
Platforms (bundled and unbundled)
• Clean share price• Tiered charging • Transparency • Rebates• Reregistration
