“While it may be debatable whether any of these changes enhances the platform end user’s experience, they do create significant regulatory or legislative development cost pressures on the platform provider, and are creating significant challenges and opportunities for adviser firms,” says Alastair Black, head of financial planning propositions at Standard Life.
The pension freedoms in particular have meant platforms have had to develop their functionality and business support services to help advisers deal with the increase in demand on their time.
Mr Black adds, “This comes from not just an increased volume of business, but a significant increase in the time per client due to the added complexities of in-retirement advice.
“While the platform market is maturing, it is by no means yet at its zenith.
“The most recent changes – the pension freedoms – create a further seismic shift in the advice landscape,” he says.
Platforms have a critical role in supporting advisers, Mr Black believes, which can create scalable processes that generate the capacity required to deliver consistent client outcomes to an increasing volume of clients that are choosing to continue investing in retirement rather than to annuitise.
Change of pace
Zurich’s Mr Wilson thinks the change of pace within the platform market is continuing.
“With a number of platforms needing to improve and modernise their technology (re-platforming), their ability to focus on further changes could be impacted.
“It will be interesting to see how advisers and their clients react to platforms that are slow to adapt or fail, and make available new financial planning opportunities,” he adds.
While the sunset clause only came into force this year, it is still unclear what effect it will have on platforms – if any. It may also have no direct impact on advisers who are now using platforms for more than just funds.
Platforms now need to be constantly developing to adapt to what advisers need – and want – particularly post-retirement freedoms.
There are also rumours about more consolidation in the market, so next year may see fewer platforms on the market.
The platform market looks very different from how it was 10 years ago, and it will undoubtedly be developing into a completely different space over the next 10 years.
