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The Federation of European Independent Financial Advisers

I am regularly asked by advisers to define what a “platform” is and also what it can do to help them in an increasingly digital world. The role of platforms has evolved greatly in recent years and one thing I always say is that a platform should not be considered a product but more accurately viewed as a service instead. This is best illustrated by advisers themselves on the testimonials page on platform websites and is where I direct people who pose this question to me.

To further illustrate the point, I say that companies such as Amazon, Google and Uber can also technically be described as a platform. In simple terms, these are not just ordinary businesses sourcing new customers, instead they are connecting users online on one side and suppliers on the other. Investment platforms aren’t really any different from these online retailers. The FCA definition of a platform is ‘a service that distributes retail investment products which are offered to retail clients by more than one product provider.’ Put another way, it is a facilitator that sits between investments and the end investors – very much in a similar way to Uber with passengers and cab drivers.

As I stated earlier, to simply view platforms as a product instead of a holistic service, ignores the true value of a platform to an adviser business. They offer much more, for example by enabling the integrated management of customers’ retirement/investment market risks and eliminating the duplication of administration whilst also providing a robust control environment – ultimately this all adds up to advisers being better placed to deliver better client outcomes.

Where a platform is adopted as an adviser’s primary tool for managing and overseeing a client’s long-term savings, unlike traditional life company solutions, they can enable advisers to implement compliant and comprehensive financial planning strategies. This is by way of easily aggregating pensions and general investments in the same place. Therefore, they represent a way of seamlessly doing business in the face of increased regulatory and compliance pressure to digitise record keeping for the ease of monitoring client investments.

In simple terms a platform usually provides custody, aggregated trading, tax wrapping, reporting and open-architecture access to assets. In practice, this is via an online tool that makes it easier for clients to trade, safeguard, administer and track investments across a range of product wrappers. For advisers, that means providing straightforward and low cost access to the assets and products that their clients want and also the tools they need to reduce the time they spend on administering this relationship.

A user friendly client access is also key to a successful platform partnership, as this is how they will ‘experience’ their financial planning. However, not all investment platforms are the same and don’t offer the same services and functionality. What services a platform provides will determine how the client will interact with their investment and pension plans. Some platforms are built to support the advisory process, assisting advisers to offer an excellent client experience. Other platforms are built for the direct market and give the non-advised end user basic information on investments they hold. Overall though, whatever their structure, a platform must ensure a positive outcome in order to be seen as a success and adopted by advisers and clients alike.

Having evolved over the past decade, platforms are now seen as mainstream and have revolutionised the way that they interact with the global advice market. With the assistance of regulatory changes globally, they have challenged the status quo and legacy offline solutions and engineered a new way forward. With this environment likely to continue into the future, adoption of a platform service into an adviser business model is key for them to keep up with this pace of change and critically still remain relevant to global client demands and expectations.


The above article was kindly provided by Paul Forman from Novia-Global.