It's been some years since Dan Waters from the FSA first expressed concern about the use of platforms by advisory firms.
A decade or so ago I started using the Fidelity FundsNetwork platform to consolidate client assets. I was immediately impressed by the contrast between the inaccurate, untimely information provided by the incumbent traditional providers and the information available from FundsNetwork.
It's therefore surprising that some ten years on I use platforms less than I did back then. And the recent moves by some software providers to encourage wider use of platforms for protection products prompted me to ask why?
With existing asset aggregation available on our present back office system, that facilitates providing extensive information to our customers, we will take much persuasion on the benefits of incurring significantly increased costs for arguably marginal benefits for protection transactions.
For us, the analysis on whether to use a platform for a client transaction is simple - what do we get from the platform that we don't get from our existing software? And what was to the benefit to the client for any extra platform fees? Our back office system provides client access through our website to all of the information we held.
It includes bulk data downloads from more than 70 sources. This also includes static information which is combined with live price feeds to provide a holistic overview of the client's financial situation. This is still much more beneficial and comprehensive than the best available information from the best platforms.
The most common arguments I hear in favour of platforms are in bulk rebalancing, bulk client fund switches and so on. With the exception of reducing out of market risk, we tend to think that platforms broadly benefit firms more than customers.
This leads me to question the need for further products, specifically protection, on platforms. If this is to replace the provider's legacy systems that presently provide a full policy download to our back office system, then hopefully this will offer reduced costs to the client's benefit.
Chris Bryans is managing director of chartered advice firm Ariun Financial Consulting
