Advisers’ platform plan may create dealer headache

In a move that could cause friction between financial advisers and dealer groups, advisers plan to include additional financial services platforms in their existing offerings in the next 12 months.

According to The Fragile Trust report by independent research group brandmanagement, 16.5 per cent of advisers are very likely or somewhat likely to use an additional platform within the next 12 months.

The report found 44.3 per cent of the planners who are considering adding a platform over the next year believe they have the ability to personally choose one, while 54.5 per cent believe they have the ability to influence their dealer group’s choice of platforms.

Platform pricing structure was named as the key reason advisers were looking to add further platforms, with 20.6 per cent of respondents indicating fees as the primary driver of change, 11.9 per cent said services issues were behind the move, and 8.1 per cent had issues with their existing platform’s functionality.

The report also found 90.5 per cent of all advisers believe there is still room for platforms to differentiate their offerings to advisers, despite suggestions around the industry that the market is commoditised.

However, while advisers might be championing the need for additional platforms, they could come up against strong opposition with dealer groups.

“From my perspective, I don’t want to have too many platforms. It’s hard enough to know one system rather than have three or four. I’ve got three platforms that I’m using, but I primarily use one more than the other two. I would like to reduce it from two rather than three,” said Calliva Wealth director of financial advice Louise Woodger.

“In running a boutique I’ve got choice, and because I’ve got choice I don’t feel as hard done by as other advisers who don’t have the choice. But if I was about to join a dealer group and I used a certain platform and I had to change over to another platform, I would be annoyed,” Woodger said.

Macquarie Wealth Management associate director Doug Webber said as long as the client understands a platform is “pretty much all about administration”, he doesn’t believe adding further platforms matters, though an adviser’s ability to influence dealer choice is subjective.

“From a practical sense, you do have to have more than one, though the worst case scenario is having 10 platforms and putting money with one fund manager or in just one stock,” Webber said.

“It also depends on the structure of the dealer group. As a dealer group, if you have 50 advisers and 25 were big writers to the other five, then they might have an influence, but at the end of the day the dealer group is only as big as its advisers.”