Fidelity Worldwide Investment struck a blow in this fight today as it announced the inclusion of a number of well established investment trusts and exchange-traded products to FundsNetwork.
Will this and other moves like it give platforms genuine fresh momentum, or merely generate a short-lived buzz and marginal rise in sales?
The argument that platforms are ‘dead’ seems to be well over the top, but there is some evidence they are not living up to their billing or delivering as much has been hoped.
This argument is well made by the Lang Cat, and rests on a few central points. Chief among them according to the consultancy, are increased competition and a deficit in the technology they are based on in terms of usability for clients.
"The danger of this is that whatever client base is there to be won, it will inevitably be spread too thinly to bring much reward for the platform providers"
Of these two, the competition increase is the bigger issue. The Lang Cat points out that the number of platforms has risen rapidly and there is more pressure coming from big US firms like Vanguard, as well as so called robo-advisers.
The danger of this is that whatever client base is there to be won, it will inevitably be spread too thinly to bring much reward for the platform providers.
Something in favour of Fidelity’s move and others like it succeeding in giving platforms a major boost however, is that they have not entirely been dreamt up in the marketing departments of investment firms.
The claim that any new initiative coming from an asset management group is a response to ‘client demand’ is frequently made, with varying degrees of truth behind it on a case by case basis.
With the expansion of product ranges for platforms there does seem to be a healthy dose of truth behind it though.
