Financial advisers are set to place less business on platforms as UK investors grapple with the cost of living crisis, research by CoreData has found.
The firm surveyed 420 UK advisers and found 33% plan to increase business on their main platform over the next 12 months – down from 44% in 2021.
The slowdown in expected platform flows is translating into less frequent usage. The proportion of advisers using platforms daily has plunged to 55% from 71% in 2021.
Daily platform usage among advisers focused on mass market clients has fallen particularly sharply (48% vs 73% in 2021).
Products
The report also shows the certainty of annuities is proving a strong pull amid ongoing market volatility.
Annuities and income drawdown remain the most in-demand products on adviser platforms and have grown in popularity (31% vs 25% in 2021). This reflects better annuity rates in 2022 which are linked to rising gilt yields and interest rates.
The second most popular products on platforms are full self-invested personal pensions (24% vs 22% in 2021), followed by discretionary investment management services (18%), which fell from 19% in 2021).
Adviser demand for investment trusts (10% vs 15% in 2021) and ETFs (6% vs 8% in 2021) has also dropped amid falling equity markets.
Choices
The CoreData study also showed Transact is the most used platform, followed by Quilter, Aviva and Abrdn.
It also found service, functionality and retirement advice services remain the top three satisfaction drivers, showing the ongoing importance of platforms performing well in these core areas.
Elsewhere, the top allocation driver prompting advisers to use one platform over another is better value for the client, highlighting a client-first mentality ahead of the incoming Consumer Duty rules.
This is followed by simpler to use, better reporting and low error rate.
The client-centric approach is further evident in attitudes towards vulnerable clients. More advisers this year said they consider tools and support services to help manage vulnerable clients when choosing a platform (53% vs 45% in 2021).
Andrew Inwood, founder and principal of CoreData, said: “Platforms may be in for a bumpy ride over the next few months as the cost-of-living crisis and volatile markets dent investor sentiment and fund flows. Those platforms able to support advisers best through a sublime service offering, flawless functionality and wide product range will emerge as winners.”
