Advisers are moving towards using fewer platforms, research by Aviva has found.
None of the advisers surveyed reported using more than five platforms, with most (70%) using two or three. This shows a reduction compared with the company’s research three years ago, which found that 11% of advisers used more than five and 58% used two or three.
Two-thirds (65%) of advisers said their firm has several platforms available and they can choose which one they use, 64% said they tend to use one main platform. These levels are broadly similar to those reported in 2020, where the corresponding figures were 64% and 61%.
However, 59% said that the longer-term aim is for firms to reduce the number of platforms they use.
‘It’s a good idea to have options’
Al Ward, head of Aviva Adviser Platform, said: “The move towards using fewer platforms is understandable in a maturing market, as advisers become accustomed to the way their preferred platform works, and the market itself is seeing more consolidation and standardised tech.
“It’s important, however, that advisers keep in mind the individual needs of their clients, some of whom might be better served on one platform over another. In the drive to provide good consumer outcomes, it’s a good idea to have options.”
According to the research, factors which impact advisers’ choice of platform have changed since 2020, when the top three were overall tech reliability (88%), followed by choice of funds available (86%) and value for money (85%).
This top three has been replaced in 2023 by ease of integration (57%), followed by range of retirement solutions (56%) and ability to build bespoke portfolios (55%).
More than half (57%) of advisers also said that difficulty of systems integration prevents them from doing their job effectively. This is almost twice as many as in 2020, where 30% reported the same issue. Similarly, more than half (55%) of advisers currently say that platform admin prevents them from doing their job properly, compared with 22% in 2020.
Over half (56%) of advisers (56%) said that it’s too difficult to switch clients to another platform – substantially more than in 2020, where only a quarter (25%) expressed this view. Aviva said this might make it harder to support ‘good outcomes’, following the implementation of Consumer Duty in July.
Value of clients’ assets
The research also found that 4% of advisers don’t segment their customer base, compared with 36% in 2020, and that client value remains the most common method of segmentation.
In addition, the findings showed a significant increase in the value of assets a client must have, before advisers will accept them as clients. In 2020, 60% of advisers said there was no lower limit on the value, but this has dropped to 22%. Advisers now require a higher asset value before taking on clients too – 40% require £30,000-£50,000, compared with 11% in 2020 and 28% require £50,000-£75,000, compared with 5% previously.
However, fewer advisers are now reporting that they require very high levels of wealth before they accept a new client, with 7% currently asking for a minimum value of £75,000 ($93,000, €85,000) or over, compared with 16% in 2020.
Administration more onerous
Ward added: “As client needs evolve, so advisers’ requirements of their platform change too. Data integration has long been an issue for advisers, and the fact that over half of them believe it stops them effectively doing their job bears this out.
“Advisers also report that administration is more onerous now than in the past, and this has impacted the ease of switching customers away from main platforms. Advisers and platform providers need to work together to ensure that these difficulties do not get in the way of delivering the best outcomes for customers, especially in the light of our Consumer Duty obligations.
“It is good news, however, that more advisers are now using customer segmentation with their client base, which means they will be better prepared to define target markets, an important consumer-duty requirement.”
