Platform business models
Some platforms could be forced to operate three separate business models.
* Model 1: pre-RDR model, using bundled share classes and allowing for adviser rebates, consumer rebates (cash or units) and platform commissions.
* Model 2: post-RDR yet pre-CP12/12, using semi-bundled share classes where consumer rebates and platform commissions are permitted.
* Model 3: clean share classes with no rebates or commissions or semi-bundled share classes with consumer unit rebates.
Key points
There are over 30 platforms operating in the UK adviser market with over £225bn under administration.
Advisers will need to ensure that they are commercially lean and that their core services can continue to be provided at a profit.
The implications of CP12/12 will accelerate the expected consolidation as platforms may elect to close to new business to avoid burdensome and expensive developments.
