Mixed bag
And while Aviva appears to have held up relatively well, not all providers have escaped the recent travails unscathed. As Table 1 shows, the Lang Cat estimates still predict a relatively rosy future for the market as a whole, and its second-quarter data suggest short-term market growth has held up well despite a fall in defined benefit transfer volumes and ever-present political and economic uncertainty.
Table 1: Estimated platform AUA growth rates
| Bear case | Central case | Bull case |
CAGR 2019-2023 | 9% | 15% | 19% |
2023 AUA | £626bn | £818bn | £971bn |
Source: The Lang Cat. Copyright: Money Management
But Mr Polson noted a significant variance between individual platforms, given that some “experienced more lacklustre inflows, and a few have seen big outflows”.
The inertia factor inevitably means many will continue with their platforms of choice, and hope that problems will be ironed out in the future. But while they are wary of major overhauls, and what they see as unnecessary extra features, many feel the basics could still be done better.
Mr Walker would like to see providers improve core functionalities such as contributions, withdrawals, trades and reporting.
“They should be able to produce this pretty well within a small-cost envelope, and then get out of the way and let us get on with looking after our clients,” he says.
Mr Catt insists that all advisers and clients want from their platform is the ease of functionality, to enable fund switching and dealing as well as obtaining real-time valuations.
He adds: “It may be helpful for the platforms to accept a wider range of funds – such as investment trusts, exchange traded funds, enterprise investment schemes and venture capital trusts – for all of these assets to be held in one arrangement. This would depend on demand for these, which would involve the education of advisers to understand their various applications and the real risks involved.”
Leave without paying
Meanwhile, regulatory changes to the landscape are still underway. The Financial Conduct Authority’s quest to make improvements to platforms saw it publish the final report of its platform market study this March. That was an underwhelming document for many, and even those changes that were proposed have been treated with scepticism.
Both Ms Hill and Mr Walker welcomed the headline policy proposal of banning exit charges. Mr Catt, however, voiced scepticism as to whether they are truly viable.
“As ever, the FCA proposals are well-meaning, but probably not commercially achievable. Obviously, freedom of movement should be as pain-free as possible and this should include minimising costs.”
But the future of the platform industry will be defined more by the actions of providers themselves rather than regulatory change. On one level, the market is becoming more piecemeal than ever, as advisers ponder doing things for themselves and smaller players carve out a niche. At the same time, however, the big continue to get bigger.
