A mix of the arrival of new nimble players, a demand for greater functionality and further shifting away from big banks and their legacy models will make 2021 a watershed year for platform providers, according to the Adviser Ratings’ “Adviser Musical Chairs Report”.
Although some established players would continue to have an edge, such as ease of use coupled with strong customer service and functionality, the report confirmed an overall theme would be a growing demand for agility at the right price which would mean those platforms who were able to offer new features without driving up the price would win advisers.
Another strong theme was the emergence of newer models that would be quickly adaptable to post-COVID demands.
“Already we are seeing platforms move to a more hybrid models where both advisers and clients can manage their investments,” the report said.
“Meanwhile, HUB24 partnered with Aberdeen Standard Investments on what it calls a ‘bionic advice’ model, where advisers and clients are supported by artificial intelligence to move towards certain wealth goals.
“There are also other innovation opportunities, such as the chance for platforms currently in the market to start targeting investors directly – something Netwealth is moving towards with retail investors.”
At the same time, new players which included Mason Stevens and Wealth02 would continue to keep vendors on their toes.
“A major challenge for the incumbents will be competing with newer, nimble players who are distancing themselves from big banks and their legacy models,” the firm noted in the report.
“Netwealth, HUB24 and emergent Wealth02 received the highest net promoter scores in Adviser Ratings’ 2020 landscape report and Wealth02 also topped the rankings for investment options from its small but a growing base of users, but significantly trailed in overall usage.”
According to the report, if speculation of fixed-fee platforms entering the market was correct, the incumbents would find themselves under further pricing pressure.
“We expect to see further consolidation of institutionally-held platforms and the emergence of newer models that can quickly adapt to post-Covid demands.
“As fee margin narrows and platforms develop the ability to perform more functions, advisers and the end clients will ultimately be the winners,” the firm said.
Overall net promoter score (NPS)