The report notes that the platform sector is seeing significant growth with total assets under administration increasing by 6% in the first quarter of 2017 to £520bn. By 2021 it is expected to almost double to exceed £1.2 trillion.
The number expecting to use platforms for more business rises to nearly half (47%) among adviser firms with six employees or more. Only 2% of advisers said that they expect to place less business on platforms, according to the Technology in the Financial Advice Market report. Aegon owns one of the largest UK intermediary platforms, Cofunds, which is soon to be rebranded.
Two thirds of advisers (66%) say that the greater convenience and time efficiency that platforms offer clients is the main reason that they are beneficial and cutting costs is a secondary factor.
A similar number (63%) point to the value to clients of the wide range of investments available, says Aegon. Other benefits for clients can include lower charges (39%), making Financial Planning more straightforward (36%), and the speed that client requests are able to be processed (34%).
More than four in five (86%) advisers find that platform technology makes the process of providing advice more cost effective although the reports says “cost is not the key driver behind platform usage amongst advisers.” More than half (57%) of advisers see cost efficiencies that they are able to pass on to clients as being the greatest benefit of the technology however.
Looking at the type of client for whom an adviser would typically use a platform, a quarter (24%) see it as a suitable option for all clients, while two thirds (65%) would judge it on a case by case basis.
Advisers also revealed that the top reasons for using a platform over a traditional life company are the access they give to better investment choice (fund options and access to Discretionary Fund Managers) (63%) and because it helps manage a range of products and investments in one portal (58%).
Steven Cameron, pensions director at Aegon said: “The new wave of technology in the financial services sector is having a transformative effect, offering opportunities for innovative products and services. Platforms in particular are changing the industry, and it’s clear that advisers are positive about the possibilities. Platforms streamline their workloads, but more importantly for them, they enable advisers to better service their clients.”
“The significant growth of defined contribution schemes and the popularity of the pension freedoms, with many more people remaining invested during retirement, mean the importance of advisers supporting investment decisions continues to grow. This has helped shape the evolving platform market, and platform providers have a central role to play in working with the intermediary community to ensure that platforms continue to offer the best possible tools to support advisers and their clients.”
• Research conducted by Opinium among 252 UK financial advisers in June.