A survey by independent financial research company Defaqto has found that a quarter of advisers questioned have changed at least one of their platform providers over the last twelve months.
Defaqto's survey asked 232 advisers using platforms about the extent and nature of their platform activity, and their level of satisfaction with the platforms they deal with. While it found that 25% of advisers have switched at least one platform provider in the last year, Defaqto has identified an increasing trend of activity in this direction. In 2010, Defaqto found that 21% had changed one of their platform operators.
Defaqto also identified the key reasons for platform switching. During 2010, quality of service was the main driver for changing platform, with 53% of advisers stating this reason. The year before, the main reason was flexibility, given by 57% of advisers.
Platform flexibility remains a key issue, and was the second most important driver of switching activity during 2010 - stated by 34% of advisers. In addition, there is an increasing focus on platform cost, but with 27% (compared to 19% in 2009) of IFAs giving this as a reason for switching it is by no means the main reason.
Interestingly, platform operators' readiness for the Retail Distribution Review is becoming less of an issue. In 2010, 19% of advisers gave this as a reason for changing provider, whereas only 4% did so in this year's survey.
Fraser Donaldson, Defaqto's Insight Analyst for Funds, said:
"Although the number of advisers that have changed platform provider has increased since last year, the most significant issue is what is driving this activity. We have found that service quality and platform flexibility are the most important factors behind platform switching. The fact that platform operators' RDR readiness is less of an issue suggests that advisers are more comfortable that providers are going to be RDR ready by the end of 2012.
"Our findings clearly show that advisers are prepared to change platform provider if they are dissatisfied with what they are receiving. They also demonstrate that service and the platform's flexibility are key issues. Both aspects need to meet advisers' requirements now and in the future if business is going to stick. For platform operators, this highlights the importance of focusing on not only meeting advisers' needs with respect to what their platform offers, but also meeting their day to day service based and relationship oriented needs."
The results of Defaqto's platform service satisfaction survey have fed into Defaqto's Market Briefing on Platforms, which covers the platform regulatory and industry landscape, platform service and advisers' platform selection activity.
To help advisers with platform selection, Defaqto's IFA research tool - Engage - includes Star Ratings on each platform provider. Each provider is given a rating of 1 to 5 based on the results of Defaqto's survey.
Defaqto also provides bespoke consultancy services for advisers, including assistance on platform due diligence, and platform providers to help them identify and address issues relating to adviser service satisfaction and to assist in the development of their product and service offerings.
|
