If ETFs are the preferred solution, it is vital that aggregated and fractional trading is available. Without this platform functionality, any cost savings are lost in individual transactional costs and due to the high nominal value of each ETF, clients are likely to suffer cash drag as only whole shares can be purchased in the absence of fractional trading.
The FCA has been clear that one should start with the client proposition first and then pick the platform that best enables delivery of it.
If these are important benefits to the investor then client-centric platforms are a must-have and well worth paying for. Given the thousands of basis points saved by clients through well thought through platform technology anything under 50bps platform charge represents excellent value for money to the client.
There are a number of roles that a platform fulfils that require significant sums of money.
These include responsibilities around being a custodian and Sipp trustee, as well as the operation of tax wrappers, including all the complexities around being a Sipp provider. These can be all-too-often overlooked.
Paul Boston is director of sales at Novia
