Platforms – Pre and Post RDR Survival of the fittest @ascentric_mike FOR PROFESSIONAL ADVISER USE ONLY Drivers to platform » » » » » » » Investment choice – started by Fund Supermarkets Asset consolidation – creating value Business efficiencies, de-risking though consistency of process Reducing the cost of saving Low cost faster internet access Mobility of end customer RDR Pre RDR Complex picture Market offerings Assets Structured Products – VCT, ITs Bonds True Open Wraps ETFs Provider Platforms Equities Cash Collectives Fund Supermarkets ISA / GIA Tax Wrappers SIPP Offshore Bond Onshore Bond Trustee Pricing models - Bundled Pays annual management charge of 1.50% Private Investor IFA Platform Fund Manager Retains 0.75% Rebates 0.25% Pays 0.50% commission Pricing Models - Unbundled Pays annual management charge of 1.50% Private Investor IFA Fund Manager Platform Retains 0.75% Pays 0.25% fee Where will the FSA land? Pays 0.50% Adviser fee Rebates 0.75% Cash account Operating models – Own Technology/Admin Platform penetration to date Investment Platform Study 2011 by Core Data • 90.7% of those surveyed use a platform • Over 50% using 1 or 2 platforms • In excess of 40% use them every day • 20% of advisers likely to add a platform in next 12 months • Just over 16% on recurring fees • 40% expect a rise in assets to main platform Commercial pressure » » » » » » Largely sales driven businesses Massive capital expenditure Just 4 profitable platforms Big brands fallen Yet more new entrants Unsustainable business models? Post RDR Evolving Picture Adviser charging B2B2C Collaboration Comparisons Competition D2C Consolidation Corporate Wrap Integrations DFM Legacy Assets Margins Multi-platform propositions New entrants Open architecture Rebates Investment Pricing Profits Re-registration Service Restricted S t o c k b r o k i n g Technology Important not to lose site of end client needs as market develops Making sense of it all Started the market Strong brand Control whole experience Limited initial capability Third party operating system Rich content and capability Traded on low pricing Fewer integrations (apps) Innovators Struggled to innovate since Less profitable model Wide choice of services (apps) Fund Supermarkets Provider Wraps Ascentric Questions when debating platforms? » What are you buying when you take on a platform? » How flexible is the solution to meet my needs today and into the future? » What is the service operating model and performance – have you been to see the “factory”? » How can they demonstrate strength and sustainability? » Do the costs represent value for my clients? » Are the terms suited to my client segmentation? » Is the product and investment choice sufficient? » Does the provider have momentum behind them?