Platform Pickup

 The number of financial advisers using investment platforms to place client business has increased in 2010, returning to the level of usage seen before the GFC caused many clients to abandon the markets in favour of cash.

Last year, the number of advisers that claimed not to be using platforms doubled year-on-year, with more than 1,271 advisers claiming they were not using platforms.

But according to CoreData’s latest Investment Platform research, in 2010 this has fallen to 899. If we assume there are 15,500 active planners in Australia, the increase in platform usage equates to more than 300 extra advisers using platforms this year.

The increase is logical given the market turnaround, however perhaps reflecting the still low levels of trading among investors in the current choppy environment, only half of advisers are using platforms on a daily basis (50.0%).

This is largely in line with last year, but down considerably on the almost two thirds (63.1%) who were using platforms daily in 2008.

One in five advisers use platforms two to three times per week, while 14.4% use platforms on a weekly basis.

The single biggest reason given for allocating funds to one platform over another was better value for the client (66.2%), followed by simplicity of use (48.1%).

Better reporting, and the fact that the platform is an integral part of their advice process, also ranked highly.

Only 3.8% of advisers admitted to choosing a platform because it provided a better rebate for the adviser.

Almost three in five advisers feel limited in their choice of platforms, and of these around two fifths (40.7%) would like access to other platforms in the market.

Interestingly, the large majority (83.5%) would use the platform to complement their existing platform, rather than replace it.