After a quiet few months in platform land it feels like things are about to change, and potentially quite dramatically. There are a number of rumours doing the rounds, here, here and here, and these are just the ones that have been published. At lang cat HQ we do have a view as to how likely each of these are, but if you want to know you’ll have to pick up the phone. Whatever happens, the current speculation does raise questions for advisers, especially in light of the recent FCA paper on platform selection and due diligence. And if any of these rumours do prove to be true, then there will be a big so what! being asked by thousands of advisers.
So what should advisers be doing? If your platform, or tech supplier to said platform is going to change ownership then we don’t think it’s panic stations time, but it does raise questions that need to be asked. It’s important to assess the provider’s ability to continue to provide the service that you expect. This requires an understanding of (but not a forensic deep dive) their financial strength, their commitment to the market and their plans to manage the period of change. Providers should be on the front foot here, giving advisers the answers before they are asked, but if they are not, advisers should be asking. Poor communication from the provider during a period of significant change is probably not a good sign.
Of course, client suitability is king, and as a result we believe any change of ownership is unlikely to see a mass migration of existing assets. However, the FCA did recently warn against a status quo bias, so there is potentially a tricky stick or twist, decision to be made. There are some interesting (or at least we think so) comparisons to be made when you assess the pricing of the platforms rumoured to be merging, so as well as the more strategic questions to be asked we suspect advisers will also want to know what it all means for individual clients. Bearing in mind the size of the platforms rumoured to be involved this could be a big exercise.
Providers who can communicate well, reassure advisers that the change will be a positive one, and then back up their messages with actions will have nothing to fear. Those that don’t will find most of their competitors will be wading and clearing up. A merger or change of ownership creates challenges throughout the organisation. There is a temptation to focus on the technology side, and whilst this is not insignificant, unless something goes badly wrong we don’t feel it will make or break the success of a merger. The ability for the entire organisation to focus on the needs of their customers, deliver on these needs, and keep advisers informed and supported throughout the process will.