Advisers wary of platform consolidation as service tops wishlist

Fundsnetwork boss expects pace of consolidation to pick up in coming years

Advisers believe platform market will undergo consolidation as smaller platforms fail to reach scale and are unable to stay profitable.

Fidelity-owned platform Fundsnetwork polled 220 advisers, 83 per cent of which expect the platform market to consolidate over the next few years.

Advisers also said that having too many platforms in the market would be a driver of consolidation.

Advisers were asked what they thought the key factors for a platform to be successful in the current environment are, with 69 per cent saying service and support was most important.

Usability and functionality was seen as being a key factor by 63 per cent of those surveyed while 42 per cent thought the platform’s ability to invest and develop would be critical to its ongoing success.

Fundsnetwork head Pat Shea says: “With the platform market expanding rapidly over the past 15 years or so, we have now reached the tipping point where there are too many players in the market and consolidation will be inevitable. It’s therefore interesting to see that so many advisory firms recognise and expect this as well.”

Shea adds: “Running and developing a platform so it continues to meet the evolving needs of advisers takes a huge amount of investment and requires platforms to reach sufficient size and scale to be able to keep this up over the long term. With this in mind, I would expect the pace of consolidation to really pick up over the coming years, and we will see the vast majority of advised assets sit with a handful of main players in the market in the future.”