Platform One is looking to drive digital transformation across the investment platforms space.
Fifteen years ago, investment platforms were a nascent and unknown sector of the wealth management industry. Today they represent over £750 billion in client assets in the UK alone and that is forecast to exceed £1.3 trillion by 2025.
The reason for this growth is that investment platforms offer financial advisers’ economies of scale, transparency for their clients and ease of access to a diverse range of financial products that would require too much administration for one financial advisory firm to manage alone. Investment platforms have done a great job of providing this access and, for the most part, digitising aspects of what was previously a paper heavy industry. However, despite some great advances in digitisation, the use of an investment platform has brought its own administrative challenges for financial advisers due to unintuitive interfaces supported by large customer service teams.
At Platform One, as an investment administration and custody platform, in the UK and Overseas, we are all too familiar with the challenges that financial advisers face day to day as they process and manage their high net worth clients.
We identified four issues which we believe best trading platforms like ourselves can solve:
Digitisation vs Automation
Investment Platforms have focused on digitisation of a paper-based industry. However, they have not yet looked to automate as much of the process as possible, allowing financial advisers to focus more on their clients and less on the admin.
Holding Hands vs Self-Service
Despite digitisation platforms have only being able to scale with people. Platform One’s focus is on scaling with user friendly and self-service tech. Having an intuitive and ‘plug and play’ platform gives financial advisers more freedom, less hassle and saves time. For example, the ability to sign up, submit digital applications, pick assets and trade without ever having to contact the business.
Vertical Integration
Financial Advisory firms increasingly want to control their distribution in one place vs across multiple platforms, while maintaining their brand with clients. Providing a quick and way to launch their own white-label platform solves this problem.
Transparency under the hood
Compared to 15 years ago retail clients are now provided with a wealth of real-time data on their holdings and transactions however there are some areas that have lagged in terms of transparency, such as transfer and trading statuses, asset request updates and more in-depth information from linked third parties e.g., DFMs or trustees.
There is one critical element to any investment platform business that is holding back most of the market from tackling the issues identified above: technology. The majority of platforms do not own or develop their own tech and rely heavily on third-party software and infrastructure houses. Although using external firms can be beneficial in the early stages of a business, past a critical mass of assets it becomes a limiting factor to growth and can lead to significant issues. Platform migrations ‘gone wrong’ have featured in the press all too regularly over the last five years. It has also inevitably led to consolidation in the marketplace thereby reducing competition. The last 48 months alone has seen a hive of activity in mergers and private equity buyouts of platform firms.
This is where Platform One has a major advantage when compared to others investment platforms. We own our IP and technology and have an in-house team of developers whose full-time job is to look at ways of improving the platform for advisers and their clients. ‘Our vision as a company is to become the leading plug and play infrastructure provider to the wealth management industry and we are doing that by focusing on the problem areas described previously.’ But why is automation and self-service so important? Many might argue that although it may have its pain points, the industry serves its purpose for now and that price is what consumers really care about if the systems meet a certain level of functionality.
The largest wealth transfer in history is underway as baby boomers (1944-1965) pass down their assets to the next generation. Estimates range that between $16 trillion – $30 trillion is being handed down and for the first time in history, into the hands of people who have grown up in the digital world.
Expectations for both retail customers and their financial advisers will be high when it comes to automation and self-service since many other facets of our lives have embraced both. Additionally, controlling your own technology, like Platform One does, means that there is a lower floor for cost as we are not paying away revenue to a third-party software house. This allows us to be more price-sensitive resulting in better value for consumers.
Platform One Services
As a business, Platform One provides three distinct services:
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Platform Service:
Regulated investment administration and custody services for IFAs and their clients in the UK and Overseas.
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Infrastructure Provider:
Tech ‘software as a service’ (SAAS) for advisory firms and other businesses.
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Branded Platform:
White-labelled platform services enabling institutions to launch their ‘own’ platform.
For our regulated platform offering, having traditionally served high net-worth clients in addition to retail clients since 2011, we can provide access to a diverse range of financial products and wrapper types, including tax-planning products such as venture capital trusts, business property relief and IHT AIM portfolios. Platform One is completely product agnostic as a standalone platform and, subject to due diligence, will engage and work with any advisers’ choice of trustee, DFM or asset manager.
