At their core, platforms are technology operations. Most platform providers will build on this base with human support, tools, branding and all manner of bells and whistles.
However, the effectiveness (or not) of the underlying technology stack will be the primary contributor towards the outcomes the firm is generating for itself and, more importantly, its customers.
From a provider’s perspective, the decision as to how to manage this underlying technology, and in particular whether to run things in-house or to outsource to a third party, is one of the most important strategic decisions that will be made.
Get it right and advisers, clients and shareholders will be delighted. Get it wrong, and you will have to deal with the consequences of the opposite.
For advisers, the decision as to what platform(s) to use within their business is equally profound. This will, of course, require a broader research and due diligence process than just focusing on the underlying technology, however said technology can not be ignored.
No adviser I know wants to spend time moving clients from one platform to another, especially if it is as a result of a poor choice being made in the past.
And with the platform technology market rapidly evolving with the emergence of credible white label and/or 'adviser as a platform' propositions, the strategic nature of selecting the right partner that providers face is starting to be felt within the advice profession.
Underlying technology | Advised AUA at Q1 2023 | Market share |
In-house | £167.49bn | 30% |
FNZ | £206.87bn | 37% |
GBST | £106.47bn | 19% |
Bravura | £79.27bn | 14% |
When we look at how these decisions have played out at provider level, we can see that 30 per cent of advised platform assets are held on in-house proprietary technology, with 70 per cent outsourced to third parties.
Over a third of these are held with FNZ, who serve the likes of Quilter, Abrdn and Aviva (amongst others). GBST assets account for 19%, held via Aegon, AJ Bell and Aviva. Bravura’s £79bn are held through the Nucleus, Fidelity and M&G Wealth Platforms.
This 70/30 split between outsourcing and in-house tech has been relatively stable for a while now.
Quilter was the most recent provider to make the leap from one side to another, with its protracted migration to FNZ. History tells us that these migrations can be hugely challenging to manage and deliver safely, which often translates to delays and projects going over budget.
With the Financial Conduct Authority's consumer duty and the need to avoid foreseeable harms looming large, any provider thinking of making this change will need to ensure the project is very effectively managed.
However, that is not to say that outsourcing is an inevitable destination for all providers.
Within the 30 per cent who are running things in-house we find hugely successful and popular platforms such as Transact, 7IM, Parmenion and True Potential.
