More than two-thirds of UK IFAs who handle pensions and investments – or 68% – currently use a platform, Splice Consulting found, in a survey of 1,000 such advisers.
But of those using a platform, "only 47% of their client-bank was registered" on one, "despite the fact that 79% of their written business is pensions and investments”, Splice said.
Just under one third of those surveyed, or 31%, said they used a single platform, while slightly more (37%) use two or more.
Splice entitled a summary of its findings, which may be found on its website, “Everything to Play For In Wide Open Platform Market”.
“With nearly a third of pensions and investment advisers not yet using a platform, 31% only using a single platform and an average of only 32% of their ‘universal’ client bank registered on a platform, the platform market is still wide open for further development,” Splice said in in its summary – an analysis that will come as good news to some in the UK platform market who have been saying that it has become too crowded and competitive, and thus is ripe for consolidation.
“Re-registration remains a barrier for taking platform market share, but there is a significant part of the market which remains untapped,” Splice added.
Splice, which is based in Leamington Spa, England, said it carried out the platform research through the use of telephone interviews between February and May of this year, targeting IFAs "with mass affluent and high net worth clients".
Fund supermarkets ‘still most popular’
Other key Splice findings include the fact that fund supermarkets remain the most popular platform concept, being viewed by advisers, the research shows, as “fit for purpose” and “providing a good performance at a competitive price” in spite of limitations in terms of product coverage.
“However, the ‘pure’ wrap operators, such as Transact, Nucleus and Novia, have a strong and loyal following,” Splice noted.
What is more, “the majority of IFAs (72%) who use a ‘pure’ wrap platform as their first choice will use a fund supermarket as their second choice,” Splice said.
And 77% of IFAs who use a life company wrap as their first choice “will also default to a fund supermarket as their second”, although if the adviser’s first choice platform is a fund supermarket, then his or her second choice will likely be another supermarket, the research revealed.
Splice Consulting managing director Julian Green noted that the “early adopters of the ‘pure’ wrap platforms” are the same advisers who took to the fund supermarkets over 10 years ago, and upgraded “to meet the more sophisticated needs of their higher value clients”.
“However, it appears more mainstream advisers are holding back from registering some of their mass affluent and future affluent clients on value-add platforms,” he added.
‘Wide range in average client FUA’
Another Splice finding was that there was a difference of more than £100,000 in average client value for funds under administration (FUA) between the platform with the highest (Transact) and the lowest (Aviva).
