Planners more likely to ditch platform

Investment Trends senior analyst Recep Peker


By Krystine Lumanta

Email Article Print Article

Related Articles: | |

Platforms’ increased responsiveness to financial planner needs had resulted in greater choice and freedom for planners to change the mix of platforms they used, according to Investment Trends.

The “May 2014 Planner Technology Report”, released last week, revealed that despite platforms achieving their highest recorded satisfaction in 11 years, 18 per cent of planners who played some role in platform selection intended to look for a new or additional platform in the next 12 months.

The report found planners had greater freedom in platform choice in 2014, with 35 per cent of respondents stating they chose from any provider they wished. This was up from 28 per cent last year.

Fewer planners, at 29 per cent, down from 39 per cent, said the reason they used a particular platform as their primary choice over another was due to dealer group preference, it said.

Investment Trends senior analyst Recep Peker said planners were more likely to stop writing new business on platforms they were less satisfied with, therefore platforms must not take planner loyalty for granted.

“There’s a very strong link between attrition and satisfaction, and consistently for a number of years now we’ve been finding that relative to their market share, the attrition is much higher for platforms with lower satisfaction ratings,” Peker told financialobserver.

“For some financial planners, their dealer group may tell them which platform to use, so in that case some platforms could get away with slightly lower satisfaction and it wouldn’t hurt their attrition numbers so much.

“But what we’re finding now is that financial planners have even more choice of platform and an outcome of this will be that the link will be stronger between attrition and lower satisfaction.”

He said the majority of platforms in the industry had very strong functionality.

“Platforms have a good understanding that adviser business is quite mobile, so if they’re not meeting all of their financial planners’ needs, planners can easily go to another platform and it’s now relatively easier for planners to switch platform providers,” he said.

“The average planner still uses 2.5 platforms each when it comes to new client money.

“We’ve found that 78 per cent of financial planners use more than one platform and that’s been consistent over the years, so they are using multiple platforms to meet their clients’ needs.”

The report also revealed that when asked which platforms planners intended to use, wraps would be the key winners from the switching.

“Planners most commonly said they were likely to start using Macquarie Wrap, BT Wrap and Asgard eWrap, including Infinity,” Peker said.

“The list was dominated by wraps and there could be a number of reasons for this, for example, with more planners doing more direct shares, wraps provide better choice and access.

“It’s not just direct shares driving that, but it’s one of the main factors.”

The study was based on a survey of 1038 financial planners concluded in May.

« Back to Articles