Amazingly the question is often asked before the buyer has even seen the goods on offer. Partly this must be the fault of the platforms, many of which delude themselves into thinking that they can squeeze the competition out of the market and only compete on price (completely lacking in imagination or confidence in their own product) who are then surprised when they rack up large losses.

You therefore see in the market today a lot of confusion over what a platform can offer to an adviser’s business model.

The focus almost exclusively on price would suggest that a platform is a simple commodity for trading funds and if that is the case, the focus should be very much on price.

But the reality is that a platform is much more than that. A platform is a vehicle that enables an adviser to deliver a truly compelling client proposition at reduced production costs and reduced business risk.

The RDR has shifted the financial focus from capturing the business (immediate gratification of initial commission), to maximising the return from an on-going service that the client feels represents value for money.

The more efficient you can make the delivery of this proposition the more profit is made and the more cost savings that can be passed on, making a proposition even more appealing and attracting new clients.

An investor in an IFA business going forward would want to know three key pieces of information;

- What is the client proposition and why would the prospect want to buy it?

- What is the recommended retail price and does it feel like value for money?

- What are the costs of producing the client proposition and therefore how much margin is there in it?

A platform should enable an adviser to deliver a world beating proposition (that they can charge a premium price for) at very small unit cost and risk to the adviser, thereby maximising the profit from each client relationship. Technology and know-how are the two key ingredients in delivering this.

Paul Boston is sales director at Novia