Investment platforms in the UK will need to reinvent themselves in a post-Retail Distribution Review (RDR) world, according to a report published jointly by Citi and The Platforum, an advisory, research and events business specialising in platforms.
The winners in this new environment will be those customer-facing platforms that have focused on their core strengths and achieved operational and technology efficiencies to deliver sufficient value to the end-customer.
The platform market has grown exponentially over the last decade. Over the last two years in particular, an explosion of propositions has occurred across multiple delivery channels and access points in terms of adviser, direct-to-consumer and workplace platforms. While platforms in the UK began as an investment and administration solution for independent financial advisers (IFAs), they have since expanded to act as delivery mechanisms in both non-advised channels and the workplace savings market.
Growing margin pressures are forcing platforms to focus on their core competencies – customer service, their front-end offerings and trading and execution quality – to differentiate themselves. Platforms must therefore determine how to remain competitive and relevant in the face of operating cost pressures and not get distracted by infrastructure and processing issues.
The report examines key players in the UK platform market and outlines the explosion of propositions which have been launched over the last two years across multiple channels. It identifies five key types of platforms and considers how many the UK market can accommodate.
While a large number of platforms may remain in the market, they are likely to be supported by five or so core global IT and administration providers.
