In most respects I have been able to get up and running straight away – travelling the country talking to advisers about savings, pensions and RDR issues. Talking to journalists speaking at conferences and writing articles.
The one area that I felt I had to immerse myself in most has been platforms, mainly the current market and key issues. Now I come very much from a solutions driven approach to platforms. In my mind a platform must be a solution that makes a real difference to the adviser’s processes and post-RDR will give them the confidence to shape a value driven advice business.
The due diligence process is vitally important for both parties, for the adviser to understand what the platform can provide and the Platform to ascertain what the adviser wants to achieve (over the years I have concluded that it is best not to assume that each party knows what the other wants but to agree it upfront!).
At the moment cost seems to be the big issue as platform providers announce their post-RDR charging structures. Another is the suggestion of how they will be dealing with the issues of clean share classes post-RDR.
Price is not always the most important factor but it is important to understand the platform provider’s motives and intentions in the future.
RDR is likely to introduce further pricing pressures both for advisers and providers in a market where a lot already struggle for profitability.
Alongside price, service and functionality also seem to be the key factors in ascertaining the value derived from a platform. Service goes without saying particularly if the platform provider purports to have a speciality in a particular area – e.g. pensions, investments.
Functionality and features are also important to a point – i.e. that advisers use the functions and do not have their own already.
Post-RDR platforms should give advisers robust and repeatable processes that can streamline the business such that the focus can be on the true product, namely advice.
For me we are entering a world where product tax wrappers are the conduits to getting money onto the platform in a tax efficient way. From there the money can be invested and managed in a way consistent with the client’s risk profile and then, when required, the tax features of each wrapper can be used to facilitate an efficient retirement.
I have spoken to advisers who use a range of platforms - from those almost tied to one platform to those using a range of different ones for different client profiles. There is no one right answer.
However much I work with platforms, I still come back to the point that the opportunities to provide advice for clients predominantly come from the traditional areas of tax and pension planning.
Mike Morrison
Head of Platform Marketing, AJ Bell