Advisers should ask “the right questions” of platforms on their technology and business models as a key part of their due diligence requirements, says Nucleus.
In its white paper launched today, which follows the FCA’s recent review on due diligence, platform Nucleus has outlined a series of key questions advisers should ask when choosing a platform.
These include issues of cybersecurity, client proposition and regulatory compliance.
Barry Neilson, Nucleus business development director, told Fund Strategy advisers need “a greater understanding” of the technology and infrastructure in place in platforms as this could lead to increasing costs and issues in customer service and data security.
He says: “There are more than £120bn of platform assets that are due to re-platform and some of these transactions will be struggling.”
“It is also the first time we’ve seen corporate changes in platform’s shareholders with many businesses going up for sale. It is important to understand the business model of the platform.
“All advisers should meet the senior management team and collect information.”
Old Mutual reported in its latest results that the cost of its re-platforming had risen from £160m to £450m while its completion date was delayed from 2016 to 2018.
Nucleus itself saw disruptions two years ago when the platform had to refund hundreds of customers after a series of trades went wrong following a technology upgrade.