But it is not quite so simple for financial advisers contemplating which offshore platform may be best for their business, experts say.
For a start, precisely what constitutes a “platform” intended for adviser use on behalf of retail clients is often subject to interpretation, with some entities that call themselves platforms actually existing more for institutional and sophisticated investors than for ordinary IFA use.
Some platforms in the international space have more extensive ranges of products on offer than others, while the degree to which advisers may expect to have their hands held by the platform company – normally in return for higher fees – also varies.
In addition, the offshore space also has been the subject, thus far, of much less objective scrutiny than the longer-established UK market, according to Sam Instone, chief executive of AES International. This, he notes, forces advisers in the international market to do more of their own research.
“In the UK, there is software available that enables advisers to compare platforms,” says Instone, whose London-based advisory company last year launched its own platform, for use by its own advisers as well as other entities.
“The UK financial press and the Platforum platform consultancy are also constantly comparing the UK platforms. But in the international space, the platforms tend to be much more embryonic, and they all have slightly different selling points.”
‘Basic elements offshore the same’
Holly Mackay, who founded the Platforum consultancy, agrees with Instone that the process of choosing a platform outside the UK is a different business than finding one onshore – where, until recently, her company’s work has mostly focussed. One of Platforum’s products is a ‘platform analysis tool’ it calls PAT, which it says helps advisers to choose between the UK’s 28 or so platform offerings.
In continental Europe, Mackay says, "there are not the same regulatory requirements on individual advisers to document a selection process," with the result that, "quite often, advisers just use the platform of the bank they work for".
"However, we do note increasing demand and interest in offshore platforms, and we think the basic elements are the same," she adds.
"Look at the provider’s financial strength,who handles client money and custody; what are the costs, what functionality is supported, and what is [the] momentum of AUA like? Users vote with their feet so the rate of growth is an important consideration."
Mackay also urges advisers not to forget that what they are shopping for is a service, and thus they should probably not "outsource the decision to software", or take a platform provider’s advice on how best to conduct their due diligence too seriously.
"There’s nothing quite like talking to existing users of a platform, so get a ‘warts and all’ view, [and] don’t be shy about asking to speak to some of the platform’s existing clients," she says.
"Do your basic homework, but then get a view from the ‘frontline’."
Adaptability, key features
John Westwood, managing director of Blacktower Financial Management Group, the UK- and Gibraltar-regulated financial advisory firm, which, like AES, also launched a platform last year, says he believes the most important criteria an adviser with international clients should consider when choosing a platform is its ability “to adapt and change as market forces and regulations change”.
“Much of the marketplace we reviewed before we launched our own platform did not meet this important criteria,” he adds.
“In the end we worked with [our] platform provider for nearly a year in order to produce a product that satisfied us, with respect to flexibility and ability to change.”
Instone recommends that advisers considering a move to an offshore platform go to the websites of the companies they are considering, and download their “key features” and “terms of business” pages. These, he says, “tell you everything you need to know.”
If the terms of business are not on the website, advisers should request them from the company, he adds.
