Difference and Differentiation: What next for investment platforms? - Paper - Page 4
Difference & Differentiation:
What next for investment platforms?
It is nearly a quarter of a century since the concept of investment platforms,
online customer-centric hubs for financial products, arrived in the UK. The
nascent idea was that an adviser could see, and manage, all their clients’
holdings in one place – supplying slick and transparent servicing, simplifying
reporting, and streamlining fee management.
The first iteration in the UK was the fund supermarket,
a move by a few fund providers to take control of
distribution, soon followed by the ‘wrap platform’
which aimed to help advisers challenge the
dominance of life companies in investment product
provision. Both models attracted progressive ‘new
model’ advisers and started to draw business away
from established product providers.
It wasn’t long before those established providers
followed suit and moved towards this new way of
engaging and serving advisers. As A-day came and
went, the life companies moved towards a SIPP
offering and the SIPP providers and wealth managers
converged on platforms. RDR was the catalyst which
led to the explosion of the platform market as a way
for advisers to access whole-of-market investment
solutions and simplify payment of advice fees. This
new model had disrupted the market to give advisers
nearly everything in one place.
Innovation S-Curve
Performance/Adoption
Market
Homogeneity
Period of disruptive
or radical
innovation, risk of
paradigm paralysis
Established
Providers
Adviser-as-Platform
Wrap Platforms
Fund Supermarket
Time/Improvement
Figure 1: Innovation S-Curve
4
