Many advisers operate a panel of platforms and pick the one that is most suitable for each client, says Mr Ashwood.
“And while platform panels might be reviewed regularly, very few advisers will [bulk] switch clients from a platform that’s fallen off a panel. When asked how long they expect a client to remain on a chosen platform, the most popular answer from advisers was ‘indefinitely’. Assets can be very sticky indeed.”
According to Ben Hammond, principal consultant at Altus, conflict of interest is another key focus area for the City watchdog, with advisers expected to ensure any provision of tools and services is appropriate for their needs when servicing their customers.
He explains: “An adviser should always have TR16/1 in the back of their mind, and ensure their platform is able to meet their regulatory requirement to effectively service their customers.
“Advisers should be performing due diligence on their selected platforms at least annually and thinking about a fuller review of the platforms they use every two to three years. Core questions will include anything from ensuring the firm is solvent, to their tone of voice when speaking to customers (if indeed they do this),” he said.
7IM’s head of intermediary, Verona Kenny, agrees that key questions should be around the financial stability of the platform, but says prior to carrying out their due diligence must consider what they need from a provider.
“The advisory firm should map out exactly what they need to support their client proposition and also their operational flows, out of this the firm can then ask the right due diligence questions to ensure that the platform can support exactly what they need,” she says.
“In addition to the above, other key questions should be around the financial stability of the platform (AuM, profitability, margins), as well as the strength of the custodian, who is ultimately the entity which is holding their clients assets.
“This should also include, questions on data protection, platform security and extent of support provided for MIFID II and other regulation requirements.”
Jenny Turton is a freelance journalist
