It isn’t enough to say ‘we have deep pockets and we will be around no matter what happens’ because that clearly isn’t the case and indeed no shareholder can or will give a guarantee to support a loss making business other than for the very short term.
Management is dreaming if it thinks a shareholder will continue to support them as they merrily burn, often obscene amounts of cash, ad infinitum.
You may ask why this matters to advisers as the clients’ money is not at risk but the impact on advisers will be severe. Poor service levels is the obvious one, which reflects badly on the adviser, eroding adviser margins.
Finally the enormous cost to the adviser of moving to a new administrator in the event that the platform’s shareholders say ‘enough is enough’ and pull out of the market or the proposition, fails to match the aspirations of advisers and their clients.
I guess the best question is, does my platform enable or constrain?
Paul Boston is sales director for Novia
