Full Sipps have risen to the top of financial advisers’ wish lists for the most desired products on investment platforms, as demand for annuities and income drawdown falls; new research shows.
A CoreData Research study surveying nearly 1,000 UK financial advisers found a quarter of respondents (23.6 per cent) would most like to see full Sipps and/or other complex pension products on platforms. Annuities and income drawdown (21.5 per cent) and discretionary investment management services (17.4 per cent) complete the top three products or services advisers want on platforms.
This year’s study sees full Sipps and/or other complex pension products replace annuities and income drawdown at the top of the platform wish list – a position they had occupied since 2014. Demand for annuities and drawdown is down significantly from last year when 33.7 per cent of advisers said they would most like to see these products on platforms.
“A key finding in this year’s study is the growing demand for full Sipps at the expense of annuities and income drawdown,” says Craig Phillips, head of International, CoreData Research. “Sipps are proving a popular option in the post-freedoms world for investors seeking greater flexibility, choice and control.”
In addition, the study shows adviser demand for ETFs is rising (11.4 per cent vs 5.3 per cent in 2017), especially among those serving the mass affluent and mass market sectors.
“As ETFs become more widely accessible and available in different variants and investors continue to search for cost-effective solutions, we expect demand to grow further,” adds Phillips.
The report also underlines the need for platforms to ensure they have robust cybersecurity defences. Seven in 10 advisers (69.6 per cent) say they increasingly consider whether a platform has adequate cybersecurity systems and controls in place when choosing a provider.
Meanwhile, platform business volumes are set to expand. Nearly four in 10 (38.7 per cent) advisers plan to increase business on their main platform in the next 12 months – up from 34.3 per cent last year. And a higher proportion of advisers intend to add more platforms to their offering (20.5 per cent vs. 15.3 per cent in 2017).
These positive market fundamentals are bolstered by growing usage levels. Nearly seven in 10 (68.1 per cent) HNW/UHNW focused advisers now use platforms on a daily basis, compared to 58.6 per cent in 2017, while daily usage among advisers focused on mass market clients has increased from 42.9 per cent last year to 49.2 per cent.
The CoreData study further reveals that adviser remuneration features, reporting capability and retirement advice/services are the top three satisfaction drivers on main platforms. The greater focus on adviser remuneration features (20.1 per cent vs. 12.1 per cent in 2017) and reporting capability (19.5 per cent vs. 16.8 per cent in 2017) highlight some of the regulatory pressures facing advisers including new MiFID II requirements.