I don’t know if any of you have ever tried the 16 Personalities test, also called the MBTI (Myers-Briggs Type Indicator) assessment.
It’s a detailed questionnaire devised in the 1960s by Katharine Cook Briggs and her daughter, Isabel Briggs Myers, which is supposed to determine one’s personality type.
Lots of my friends and family have taken the test several times. Most of them got a slightly different answer on each occasion, depending on what mood they had been in.
Really, it is up to the incumbent players to raise their game to ensure advisers get the best service possible
However, I’ve done it five times and each time I got the same answer — ‘ENTP: The Debater’. So when I recently attended NextWealth Live — an adviser conference in London — there was one session in particular that caught my eye.
It was a debate between two well-known industry figures, Seccl CEO Dave Ferguson and Benchmark Capital managing director of wealth Ed Dymott, about whether the ‘adviser owned’ model would take over the platforms space.
Ferguson argues that being in charge of its own platform gives an advice firm more control and enables it to take a bigger slice of the pie (I’m paraphrasing) because platform costs do not have to be paid.
For an IFA, is the best course of action to take on all of the regulatory burden and compliance cost that running a platform entails?
But Dymott insists that simply owning a platform does not fix the issue of integration, nor does it give the adviser any greater control. He says it just makes technology the adviser’s problem when things go wrong. The amount of money they might save is not worth the headache of compliance.
Poles apart
It is not just Ferguson and Dymott who disagree on this topic. It seems to divide opinion in an almost emotive way, as I discovered recently when working on an in-depth article on the matter.
I spoke to a huge number of platform sector commentators. Unsurprisingly, many of the incumbent platforms do not believe this model will take off, while many of the start-ups do.
The ‘adviser owned’ platform model is not exactly a new concept
On one hand, those in favour of the move to the platform operator model say it makes complete sense to cut out the middleman. They believe it gives advice firms more control over their own processes and allows them to simplify their business.
But those who disagree argue that it actually makes things more complicated and, in many cases, costlier for advice firms.
And it is more than the viability of the model that is up for debate. People have differing opinions on what it even is in the first place.
You might reasonably think an ‘adviser-owned platform’ was a platform completely owned by an adviser, but you would be mistaken. There is so much more to it than that. Novia chief commercial officer Barry Neilson, to whom I spoke for my article, says there is a “real lack of clarity” over what ‘adviser-owned platform’ actually means.
Unsurprisingly, many of the incumbent platforms do not believe this model will take off, while many of the start-ups do
As with many aspects of financial services, there are numerous models that have been defined by different organisations. And people frequently use the terms ‘white label’, ‘adviser owned’, ‘adviser as platform’ and ‘adviser platform operator’ interchangeably. This inevitably hinders the quality of discussion.
Why now?
One question I was interested to investigate was why this debate had reared its head now. The ‘adviser owned’ platform model is not exactly a new concept.
I read an article written by Money Marketing former editor Justin Cash when he was still at the publication back in early 2021. He laid out pretty much the same arguments I heard when researching my recent piece.
It is not just Ferguson and Dymott who disagree on this topic
Most bodies — whether a large incumbent or a smaller start-up — seem to agree there is not enough innovation in the platform sector. But, for an IFA, is the best course of action to take on all of the regulatory burden and compliance cost that running a platform entails?
Maybe it works for some of the larger national advice firms with assets of more than £1bn, but it is unlikely to take off among smaller advice businesses.
Really, it is up to the incumbent players to raise their game to ensure advisers get the best service possible.
Lois Vallely is chief reporter. Contact her at: lois.vallely@moneymarketing.co.uk
This article featured in the May 2023 edition of MM.
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