Advisers gravitate toward platforms amid Covid-19 pandemic

Data streaming

Financial advisers have gravitated toward platforms in the wake of the Covid-19 crisis, new research shows.

A CoreData Research study of nearly 1,000 UK financial advisers carried out in May and June found respondents are using platforms more frequently, have higher levels of satisfaction and are set to do more business on platforms.

All UK advisers surveyed (100 per cent vs 99 per cent in 2019) use platforms, while 68 per cent use them daily – up from 60 per cent last year. In terms of client wealth segments, eight in 10 (79 per cent) HNW/UHNW focused advisers now use platforms daily — up from 73 per cent in 2019. And while daily usage among mass market advisers has surged from 48 per cent in 2019 to 63 per cent, more mass affluent advisers also use platforms daily (58 per cent vs 53 per cent in 2019).

This is set to translate into rising platform flows — more than a third (35 per cent vs 33 per cent in 2019) of advisers intend to increase business on their main platform over the next 12 months.

These strong usage numbers and expected flows come amid rising levels of platform satisfaction. An overwhelming majority of advisers (92 per cent vs. 82 per cent in 2019) say they are largely satisfied with their main platform, awarding a score of 7,8,9 or 10 out of 10. Furthermore, nearly four in 10 (39 per cent vs 34 per cent in 2019) give their main platform a top score of 9 or 10 on the satisfaction scale.

In addition, fewer advisers this year (13 per cent vs. 19 per cent in 2019) plan to add one or more platforms to their business over the next 12 months — indicating advisers are happy with their current providers.

“Our findings suggest that platforms have not only weathered the Covid-19 crisis but have managed to build closer partnerships with advisers,” says Craig Phillips, head of International, CoreData Research. “The shift to digital-first offerings amid the crisis, coupled with the heightened need to support clients, has seen advisers gravitate toward platforms.”

Meanwhile, annuities and income drawdown (32 per cent vs 37 per cent in 2019) remain the most desired products on platforms, followed by full Sipps (20 per cent vs 23 per cent in 2019), although these numbers are down on 2019.

But demand for DFMs has increased, highlighting the growing popularity of outsourced solutions as advisers look to focus on financial planning. Nearly one in five advisers (18 per cent vs 11 per cent in 2019) point to DFMs as the product or service they most want on platforms. This year’s survey also reveals increased appetite for ETFs, seen as the most desired product by 10 per cent of advisers (vs 7 per cent in 2019).

Elsewhere, more than half (53 per cent) of advisers say they increasingly consider tools and support services to help manage vulnerable clients when choosing a platform provider.