That's A Wrap

Transact and Nucleus are the two most highly rated platforms by independent financial advisers (IFAs), according to new research released this week in the UK.

CoreData’s Wrap and Platform Research 2009 report has found that Transact is seen as the best overall large platform provider, ahead of Cofunds, Fidelity Fundsnetwork, Skandia and Standard Life’s fund supermarket, Fund Zone.

These platforms dominate the wrap and platform market in Britain in terms of size and fund flows.

Among the group of middle-band platforms, Nucleus is seen as the best overall medium platform, ahead of Abbey, Ascentric, Seven Investment Management and Standard Life’s wrap proposition.

The findings are based on research of UK IFAs conducted in April and May.

CoreData measured platform performance on 40 separate metrics covering functionality, product and investment range, fees and underlying costs, adviser remuneration, service, support and reporting capability.

Transact was highly rated for its functionality and ease of use, the choice of products and services available to IFAs and on service and support factors, while Nucleus also performed well overall on its functionality, the choice of products and services offered and its flexibility to suit adviser needs.

CoreData Research director Matthew Craig commented: “We have benchmarked the main platforms in the market and Transact and Nucleus scored very well on a wide range of measures among IFAs. The challenge for them will be in maintaining their standards as competition intensifies and, in the case of Nucleus, as it grows, as our evidence from other markets such as Australia, shows that platforms often start to creak as they increase in size.”

Among other platforms, Seven Investment Management was rated particularly highly for investment switching and administration, while Standard Life’s wrap was seen as very good for connectivity between desktop and the platform and for online transactions.

Ascentric was highly regarded for reporting purposes and Skandia rated highly for the tools offered on the platform, the cost of the platform to the adviser and the cost of tax wrappers and for sales support.

In looking at the broader picture, CoreData’s research found IFAs had immediate concerns over difficult market conditions and winning business. Underlying this, there are clears signs that IFAs also face challenges in using platforms to make their businesses more efficient.

Asked what were the most important challenges facing them, a third of advisers said ‘difficult investment market conditions’, compared to 24% for regulatory change endangering IFAs as a distribution channel and 21% for ‘lack of consumer trust in the financial services industry’.

On the most urgent specific needs for their businesses, 54% of advisers cited more effective marketing, while 51% picked from efficient administration systems (IFAs could chose more than one option).

At the same time, CoreData found that most advisers use more than one platform with 33.6% using two platforms and 26% using three platforms.

Craig commented: “Advisers are less concerned with administration and efficiency issues in the current economic climate as their priority is primarily on attracting business from new and existing clients. “

“Looking ahead though, the use of multiple platforms could be a hindrance to greater efficiency at advisers’ businesses. It also suggests that advisers are not getting everything they want from a single platform, despite the fact that 51% of advisers say more efficient administration systems are a core driver for them.”

This story is an extract from an article that appeared in the Financial Times’ Financial Adviser magazine.