Investment choice tops adviser platform leaderboard
The top reason cited by financial advisers for choosing a platform is to gain access to a better range of investment choice, according to research by Aegon.
In the report Technology in the financial advice market, nearly two-thirds (63%) of advisers said their principal reason for using a platform over a traditional life company was that it offered access to better investment choice.
The second most popular reason (58%) was that platforms helped manage a range of products and investments via a single portal while being cost-effective emerged as the third most popular reason (38%).
Although cost was not the biggest driver behind their platform habits, almost nine out of 10 advisers (86%) said they found platform technology made the process of providing advice more cost-effective, while a similar proportion (82%) believed it made the process more straightforward.
Aegon surveyed 252 advisers and found the overall appetite for platforms among advisers was increasing - more than a third (36%) of respondents expected to direct more business to platforms over the next 12 months, rising to nearly half (47%) among adviser firms with six employees or more.
Aegon said the platform sector had seen assets under administration increase by 6% in the first quarter of 2017 to £520bn and expected this figure would nearly double to at least £1.2tn by 2021.
Advisers appeared to be clear on the main benefits of platforms for clients, with two-thirds (66%) flagging up the greater convenience and time efficiency they offer.
A similar number (63%) pointed to the value to clients of the wide range of investments available. The number one benefit found however, agreed on by 86% of advisers, was straight-through processing and the ability to transact without paper.
Pension Dashboard - An Opportunity?
While advisers appeared to be enthusiastic about platforms, the same could not be said for the pension dashboard project. Just a quarter (26%) of those surveyed by Aegon saw the dashboard as an example of technology that gave an opportunity to provide advice.
The Association of British Insurers last week revealed access to financial advisers would not be a requirement for the initial pension dashboard but rather part of the"future vision" of the project.
Aegon pensions director Steven Cameron said technology was having a"transformative effect" on financial services.
He added:"Platforms, in particular, are changing the industry and it is clear advisers are positive about the possibilities. Platforms streamline their workloads but, more importantly for them, they enable advisers to better service their clients."