Bias has been the scourge of our broader market for years and it remains disappointing that this kind of damaging behaviour persists. Too much ‘shareholder before customer’ conflict will invariably play out to the detriment of customers.
There continue to be massive differences in functionality and connectivity between platforms, and while some areas have become more commoditised, there are few instances where apple-to-apple comparisons can readily be made. Most surprisingly, this is even true where the same technology vendor sits behind the platforms under comparison.
Aside from a few areas, this gap seems set to widen before it narrows as platforms take an increasingly prominent role in the sector. If you look at how the discretionary fund manager sector has been forced to reorganise to respect the new order of the market and extrapolate that theme across other areas of the market, we are some way adrift of harmonisation.
Likewise connectivity. Whether between platforms and back-office systems, cashflow modelling tools, risk profilers, regulatory systems or any of the myriad of tools in use, there remains wide disparity in the breadth and quality of execution in this area. Part of the problem is the sheer number of potential integrations. Another is the technology enabling the integration. While the rest of society is embracing web services, there are huge sectors of retail financial services still relying on proprietary standards to join up systems.
Beyond these areas, the key point seems to be the extent to which advisers might use a single platform. Given that the FCA is fed up answering this question there is probably little more to add, but I would imagine that provided the customer outcome has been the primary consideration in each instance there is little to fear. Similarly, and even recognising the potential operational benefits of single-platform use, for as long as the adviser market is restructuring via exits or consolidation there can be few firms for which a single platform model is truly achievable.
This position seems set to naturally evolve in keeping with the shape of the respective adviser and platform markets, and it does not feel like a terrible stretch to imagine a situation in 10 years’ time where platform pricing has converged to such an extent that single platform models are more prevalent than today. That certainly seems more plausible to me than the occasionally revitalised wrap-of-wraps model oriented around a back-office system.
