Platforms have become part and parcel of the financial advice space and more firms are starting to see the benefits.
South African advice firm Carrick Wealth uses platform provider Praemium and has compared the general adviser/platform relationship to a “great marriage”, based on “trust, transparency, communication and fair exchange”.
The firm told International Adviser: “The future of platforms is bright, especially due to the ailing insurance wrapper industry due to antiquated systems, bureaucracy and high fees.
“They will dominate the advisory space and will most certainly take over from the old and slow life insurance products.”
Benefits
But is there much difference between the platforms operating in the market?
The short answer is ‘yes’, as they all have different strategies and ideas.
Carrick Wealth said that advisers are looking for:
- safety and security,
- low dealing and custody fees,
- streamlined onboarding and processing times,
- open architecture investing,
- quick response time on queries,
- on-the-ground support to assist with more complex cases,
- the platform to build a strong relationship with advisers’ back office, and
- technical onboarding with all international trust/pension/bond providers utilised.
As much as costs are a big part of the sector, platforms can be used to improve a firm’s relationship with their clients.
“We want two things from a platform; first, to deliver a phenomenal client experience,” said Carrick Wealth. “Second, we want to unburden our advisers so that they can spend more time with clients, as opposed to doing admin.
“Both the client and adviser experience are of paramount importance.
“The international financial advisory space is antiquated and consists of very basic financial products. The firm that can innovate and attract distribution through partnership will be the firm to dominate.”
Options in the market
There are many different providers in the international market for financial advisers to choose from.
So, how can an adviser make sure they pick the best one?
“There are in my mind three types of platform,” Carrick Wealth said.
“The first is the ‘dodgy’ back-street platform that has been created on a shoestring budget with complicated fees that hide charges of both the adviser and the platform provider.
“The second type of platform has good intentions but not the budget, so the client experience and adviser support is not all that great.
“Finally, there are a handful of great platforms that have done it right and got the balance spot on. It then comes down to the relationship and the type of partnership that can be formed that will dictate the final choice.”
Fees can be a play a big part, and the South African firm said that they “play a crucial role” in the decision-making process, “as there can be multiple layers of fees when structuring a client’s investments”.
“However, we have always balanced fees with service. We work to ensure the client understands the costs they are paying and the value they are receiving for the fees paid.”
Tech advances
On its wishlist, Carrick Wealth would like to see platforms deliver:
- Client proposal docs, client advice records and client quarterly review docs;
- Planning tools such as retirement and tax calculators;
- Greater hands-on fund reporting;
- Stop loss alerts and profit gain alerts; and
- Access via an app.
