Platform focus: Aviva’s quiet ambition begins to bear fruit

Aviva is in the spotlight this week. The platform has increased its assets under administration by an impressive 69.5 per cent, from £4.5bn in Q3 2014 to £6.6bn in Q3 this year. Net sales data for the last quarter is similarly notable at £840m.

Its AUA growth can partly be explained by the transferring of off-platform assets onto it. However, Friends Life’s decision to transfer the lion’s share of Axa Investment Managers’ segregated mandates to Aviva Investors this month will not figure in data until next quarter.

From April, Aviva has seen a spike in assets moving into advised drawdown from other platforms, reporting just over £964m in its post-decumulation Sipp wrapper in Q2.

Meanwhile, a growing proportion of assets are flowing into model portfolios, with DFM models in particular gaining traction with advisers. Aviva offers 29 DFMs with model portfolios and sees working with them to help promote the benefits to advisers of being on platform as a key strategy.

The platform is also introducing a new range of governed funds called Select this month, using the research power at Aviva Investors to help advisers with their centralised investment propositions.

When it launched in 2009, Aviva famously sought to become the secondary platform of choice for advisers. More recently, however, it has become quietly ambitious, steadily increasing its share of business from existing users. In a recent Platforum survey, 33 per cent of advisers said Aviva was their primary platform, up from 19 per cent in Q3 last year.

It is winning business from new sources too. Indeed, in our July survey, 53 per cent of advisers said they would consider placing new business with the platform, a figure only bettered by Standard Life.

A fifth of advisers tell us low charges are the key criterion in selecting a platform, and Aviva’s competitive fees are a strong selling point. In some pricing scenarios we run, its charges come out 25 per cent lower than the market average for both buy-and-hold and model portfolio investors with portfolio sizes of £50,000 and £100,000.

Aviva does come in for some criticism on its functionality, however, with one adviser telling us of their frustration at its “inadequate online tools such as asset allocation models”. Aviva’s view is that many advisers prefer to use independent asset allocation and risk profiling tools, which is why it does not offer them. However, it is launching a retirement forecaster to help advisers with client conversations on retirement options.

The platform uses Bravura’s Talisman technology but is looking to re-platform to the Sonata technology, also run by Bravura.

Aviva’s stable of platforms includes its direct-to-consumer proposition and the Friends Life workplace platform My Money. Both use FNZ technology. In the long term the platform bosses recognise that working with two different technology partners has strategic implications for the business.

Aviva is clearly focused on keeping its costs competitive, with an easy-to-use platform that offers a good service. Advisers rate highly its ability to attract new business, retain assets and expand relationships. We see Aviva as exceptionally well positioned for growth.

Miranda Seath is senior researcher at Platforum.