I’ll begin by making a perhaps surprising admission: yes, I think resistance to the Borg-like juggernaut that is the platform market probably is largely futile.
After all, around 80% of advised AUM is now “assimilated” and held on-platform, and that number doesn’t look like getting any smaller.
And, critically, the fact is that most advisers are probably quite happy with their platform proposition, thank you very much – and in the vast majority of cases, rightly so.
So, as a provider of an off-platform Sipp, I must be preparing to surrender and face the void, right? Well, no – not at all, actually.
The evolution of platforms has been a Borg-like march of implacable expansion
Rather, I’d like to pose a mildly provocative question and a hopefully timely reminder.
The evolution of platforms has been a Borg-like march of implacable expansion: from custody to investment integration; investment integration then became wrapper control; to the present-day market, where platforms are now offering life co-style products to increasingly retain every slice of client capital.
Star Trek’s Borg civilisation is also of course a well-known metaphor for groupthink. However, I’m not suggesting that advisers are becoming assimilated drones.
But my mildly provocative question is this: are advisers sure that they’re not being subtly and incrementally nudged towards “platform-shaped” groupthink?
Or put another way, while it’s likely to be suitable for the bulk of your clients, is the path of least resistance that leads to products and services offered by your primary platform provider the right one for every slice of your client capital?
How does even a tacit narrowing of your product purview square with the Consumer Duty, and what the FCA would consider “appropriate segmentation”?
Which is all to say, to what extent is advice being led by product architecture as opposed to client needs?
The difference between best and worst in off-platform land is probably more pronounced than it is in platform land
“Says the voice of self-interest,” I hear you say. Maybe so. And I acknowledge that the answer to the last question is very likely “not at all” in most cases. Nevertheless, it might still be one worth asking as a hygiene check, if you will.
I also freely acknowledge that the difference between best and worst in off-platform land is probably more pronounced than it is in platform land.
There’s plenty of independent offerings that are pretty antiquated, still paper-heavy, and getting data out of them is akin to drawing teeth.
But at the right end of that spectrum lie options that just might suit some of your clients better, for example those that are pension-only. That is, where a proposition that offers flexibility, independence – and more competitive pricing – may well be what’s really appropriate.
To get more forensic, think about the distinction between accumulation planning versus decumulation.
In the former case, you’re thinking principally about attitude to risk, capacity for loss and investment term.
Once a client is set up, you’d expect most clients to straightforwardly benefit from exposure to the right risk assets over the term. As such, it’s likely that you’ll find a platform product is a more than adequate home in these cases.
Decumulation, though, isn’t a simple ‘stick and hold’ strategy. Rather, you’ll be thinking about changing income needs over time, IHT planning, accounting for sequencing risk and so on.
So, rather than a generic bucket, it seems intuitive that a more bespoke exercise might well benefit from a more bespoke solution.
If you pick up the phone to us, we will actually answer it and provide a real answer to your query. Will your platform? I think we all know the answer to that
This is not a sales call, though, so I’ll let you do your research if you’re so inclined.
But I will remind you that if you pick up the phone to us, we will actually answer it and provide a real answer to your query. Will your platform? I think we all know the answer to that.
Ultimately, though, as I’ve already conceded, resistance is mostly futile.
Just remember, though, that platforms are not neutral infrastructure – and they’ll absorb your discretion entirely, if you let them.