Reflecting on another excellent evening at the Schroder’s UK Platform Awards, it was great to see the level of competition across the sector and how firms are exploring new technology and services to improve adviser and customer propositions. A big part of this was the presence of firms like Fundment, Hubwise, and Seccl all being nominated or underpinning an award winner. As nominees were read out, and winners collected their trophies, it was great to recognise, from an Altus perspective, how many of those firms and platform solutions we have worked with over the years, and are continuing to work with to deliver transformative change and improvement across the sector.
The technological evolution of platforms has, at times, been stuttered and halting following the initial surge, as new platforms were formed and established providers leapt onto the new distribution and service model. Looking across the sector, there is still a good spread of underlying technology and service models; 35% of £AUA is run on a proprietary solution (HL being the lion’s share) with FNZ, GBST, and Bravura largely covering the rest.
£AUA data from Finscape
Apart from a handful of high-profile replatforming exercises, the technology landscape has, to date, been relatively stable across the sector, with most firms maintaining their own systems or original third-party vendor.
Clearly there has been much speculation about Bravura over recent years. While the Fidelity deal secures their presence, the uncertainty around M&G Wealth will be a consideration for other users and firms assessing options. The upcoming move of Nucleus across to FNZ will also shift some more Bravura market share as well as a good chunk of Proprietary. We can also see SS&C making some inroads with their Hubwise solution (most of the above is SJP) with Fundment and Seccl amongst the fast followers. With these known moves and expectations around upcoming ones this seems to indicate a shift towards a ‘service delivery’ model, rather than just technology provision expected by material third-party suppliers.
Often coming with long-term commercial agreements and a huge amount of sunk-cost, there can be reticence to consider a technology switch – in part driven by the much-publicised disruption that activity can cause – so perhaps growth for newer providers will always come from new market entrants. However, firms have an obligation to consider their technology and service suppliers on a regular basis, not just from an internal commercial standpoint, or propositional breadth, but also driven by Operational Resilience considerations, so we may well see a big platform tech move that isn’t just driven by merger or acquisition.
Looking back across the selections and implementations we have been involved with, it has been distributed across the main tech players in the market [FNZ (30%), SS&C (10%), GBST (20%), Bravura (35%), Others (5%)] – in almost similar proportion to the AUA – which is great for our clients as it means our knowledge, experience, and relationships can really be representative of the whole market, rather than one or two vendors.
Having a consistent way of understanding what your current vendor delivers for you, and what is available in the market, becomes increasingly important across technology, operations, and proposition perspectives. Running a set of blind RFIs to window shop the market can be a time-consuming exercise and something that may only make sense as any contract nears renegotiation or breakpoint, so getting that market view without deploying a project team and tying up key subject matter experts is essential.
Those that know Altus Consulting will know that we love a good framework model to simplify complexity and create accessible visual output. These techniques have been used in technology and service selection exercises in all the financial services sectors we work across; platforms are no exception. The power of this understanding doesn’t just end with a vendor selection but can persist through the whole business transformation to define boundary models (who is responsible for doing what), ownership and accountability of important business services, cost of ownership, mapping of systems and technology changes, and much more.
In an uncertain world, having a clear view of your business and service providers is more important than ever.
