Platform loyalty strong but tested by fees
The loyalty of planners to any one platform is being tested by rising fees, homogenised features and the increasing freedom for planners to choose their own platform over a dealer group preference.
However more than a quarter of financial planners use a platform owned by Westpac while nearly a fifth use one owned by the Commonwealth Bank according to research released by Investment Trends as part of its 2014 Planner Technology Report.
The report surveyed 1038 financial planners in May this year and found the average planners used two and half platforms, and while this number had remained unchanged since 2013 planners had indicated they had changed at least one of the platforms they used in the past 12 months.
Investment Trends senior analyst Recep Peker said there was a direct relationship between planner satisfaction and attrition and the key reasons for planners shifting platforms were fees and features.
However Peker said planners had also been given greater freedom of choice in the last year with 35 per cent stating they could choose any provider, up from 28 per cent, with less planners (29 per cent, down from 36 per cent) stating they used a platform as a result of dealer group preference.
Peker said the switching of platforms in the last 12 months was evident with about 25 per cent reporting they had stopped investing new client flows through at least one platform and focussed on the platforms addressed their needs.
While Westpac figured highly in responses, with BT Wrap rated the highest used platform and Asgard Infinity eWRAP rated the fourth most used platform, Peker said planner loyalty, even though at an 11 year high, was not set in stone.
According to Peker this level of satisfaction can be attributed to survivorship bias with planners dropping platforms they are less satisfied with in favour of those responding to planner needs.
"Recent enhancements to usability, adviser support, reporting, direct shares and corporate actions functionality has played a key role in driving satisfaction to new records."
"Despite platform satisfaction hitting record levels, planners' loyalty should not be taken for granted. 18 per cent of planners who play some role in platform selection intend to look for a new or additional platform in the next 12 months."
"When asked which platforms they plan to use, it appears the wraps will be the key winners from this switching, with planners most commonly saying they're likely to start using Macquarie Wrap, BT Wrap and Asgard eWRAP (including Infinity)."
AUTHOR
Jason Spits
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
