Financial advice firms with between six and 50 advisers are the most likely to have adopted platform models with a degree of customisation.
However, they are doing this without taking on the regulatory responsibilities themselves, new research from NextWealth has found.
Nearly half of firms with more than £250m in assets under advice have a fully customised platform, but there is no one-size-fits-all model.
NextWealth consulting director, Emma Napier, said: “Platform choice was never a simple, one-time decision, but it was once a more straightforward comparison between third-party platform providers.
“Now, advisers must navigate not only different providers but also varying platform models, adding a new layer of complexity to the selection process.
“Advice firms now have multiple options, from running a panel of preferred platforms, choosing a DFM that operates a platform, right through to operating their own platform.”
To make sense of the platform landscape and help advice firms choose the right solution, Aegon, Embark, Nucleus and P1 Platform commissioned NextWealth to produce a comprehensive guide.
The guide, Platforms Unpacked: Selecting a model to fit your firm, aims to help advice firms ask the right questions before looking at specific platforms.
Questions asked include:
• What are you as a business? What is your vision and core function?
• Who are your clients? What are their similarities, differences and needs?
• What is your firm’s culture? What are the interests, passions and ambitions of your people?
• What are your ‘problem statements’ – what specifically is holding you back from delivering the service you want? And can a different platform model solve that problem or is there another solution?
• What platform strategy fits your business model?
Stephen Crosbie, managing director, Adviser Platform at Aegon, said: “Choosing the right platform model is one of the most important strategic decisions an advice firm can make, but it’s not always a straightforward one.
“We’re pleased to support this guide, which helps advisers unpack the opportunities, benefits, and risks of different platform models and hear first-hand experiences from their peers.”
Chris Williams, managing director of Third Financial, part of the Nucleus group, added: “To say the platform space is dynamic would be an understatement.
“This is a good thing. The diverse and evolving needs of clients deserves a range of diverse and flexible businesses to serve them – and thanks to technology, adviser demand and a growing cohort of scale advice firms, innovation is thriving.”
James Priday, chief executive of P1 Platform, also said: “Platform choice is such a crucial decision for an advice firm. The right platform can not only make an advice firm more efficient, but it can also massively improve the end customer experience. Asking the right questions before making a change is crucial”.
Platforms Unpacked uses insights gained from 19 in-depth interviews with senior executives representing: four vertically integrated financial advice firms; three consolidators; seven planning-led financial advice firms; three external compliance specialists, plus two independent industry consultants.
It also uses quantitative data analysis is based on an online survey of 340 financial advice professionals.
Napier added: “Any platform transition requires more than a simple ‘lift and shift’ of client assets: it demands a reassessment of processes, integrations, and efficiencies.
“No single model is a silver bullet either. Even the most well-structured platform strategy will likely require some creative problem-solving to bridge gaps in functionality, data access, and compliance.
“Ultimately, the right platform decision is one that enables firms to focus on what matters most: delivering high-quality financial advice while maintaining operational resilience and regulatory compliance.”
Platforms Unpacked: Selecting a model to fit your firm is available to download free from the NextWealth website.
