Advisers' platform loyalty wanes

8 July 2020

Netwealth has again emerged as the preferred investment platform for financial advisers, but neither it nor other platform providers should get too relaxed in circumstances where advisers are demonstrating less platform loyalty and a willingness to change providers.

That is the bottom line of new research released by Investment Trends which had shown that 29% of planners had stopped placing new business on a platform and increased their switching activity.

The research also pointed to some changes with respect to advice software with AdviserLogic taking the laurels in terms of adviser satisfaction ahead of Midwinter and Xplan.

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Investment Trends research director, Recep Peker, said the company’s research suggested platform relationships were being challenged by the twin headwinds of the Royal Commission and the global pandemic.

“Not only has platform switching reached a post-Global Financial Crisis high, planners are also broadening the range of platforms they use,” he said. “The average planner uses 2.6 platforms each, reversing the consolidation seen in the last two years (up from 2.3 in 2018 and 2.1 in 2019).”

“In the face of pandemic-induced market volatility, financial planners are relying heavily on platforms for high quality service and support, with minimised service disruptions,” he said.

Peker said the research showed that, industry wide, planners were generally satisfied with the support provided by their platforms through the COVID-19 pandemic (77% rated it as ‘good’ or ‘adequate’), but there was room to improve since almost a quarter (23%) were dissatisfied.

He said the pandemic and associated lockdown had transformed the way financial planners communicated and engaged with the clients, further accelerating their adoption of digital tools.

In terms of adviser satisfaction with platforms, the Investment Trends research once again placed Netwealth at number one, followed by HUB24, CFS FirstChoice, BT Panorama and Macquarie Wrap.

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I don't agree that the Investment Trends research says Netwealth is the preferred platform for advisers, not by a long shot. The IT research surveys review platforms for a range of features, some of which are hardly relevant anymore such as the ability to do risk applications on an investment platform - often a result of conflicted relationships. Furthermore, it doesn't yet include features like the ability to integrate and report on non-custodial assets, an increasingly valuable and sought after feature which some platforms are great at and others are only just starting to develop.

CFS is gone, they just don't know it yet.

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