Gold In Them Thar Hills

Some say its better to sell the tools for mining rather than mine for precious minerals – certainty over uncertainty.

The development of corporate platforms is one of the latest trends in the UK wrap and platform market.

Platforms for advisers have been around for some time, initially as fund supermarkets and more recently via the onset of holistic wraps.

In the consumer space, one firm, Hargreaves Lansdown, has a near-monopoly of the direct space through its Vantage platform that allows mums and dads to invest directly in a broad range of funds.

But for many life offices, fund managers and even employee benefit consultants, developing a corporate wrap is next big thing.

There are a number of different ideas of what such a product might look like.

At present, an employer might source their pension scheme, medical cover and death-in-service benefits, along with other benefits, from a range of suppliers.

So a corporate platform could act as a single vehicle for accessing a variety of corporate benefits, with a consultant assisting the employer in making their choices and installing the benefits.

Naturally, the employee benefit consultants have been quick to see the potential of this vision and are now working on developing their own offerings.

In a way, this mirrors their activities in the pensions and investments arena, where some consultants are moving up the value chain by becoming manufacturers, offering fiduciary management, implemented consulting or manager-of-manager services.

Another iteration of the corporate platform consultant could see insurance companies developing a platform to allow them to help employees offer a wider range of benefits to the employee via their own desktop PC.

Existing platform providers can also see the opportunities on offer here and are now working up their corporate propositions.

The natural market for these platforms is seen as the companies making up the FTSE 250 index, particularly those with share-save schemes, which can be combined with pensions in a very tax-efficient manner.

At present, the corporate platform market is a bit like a gold rush in nineteenth century North America.

There are strong and persistent rumours of lucrative new opportunities and many speculators are gearing pans at the ready to sift for gold.

But not all will be successful and those selling picks and shovels might be as successful as those digging up the gold.

It will take time to see which strategies work, but for now the market looks like keeping activity in the platform space bubbling along nicely.