“Financial strength can be a good guide to the security of the client’s assets, but an adviser should always familiarise themselves with how the research agency has made that assessment and be comfortable with it,” he adds.
“The ownership structure and commitment to the market of the platform’s owner should also be considered, to guard against any unexpected changes that means the adviser has to revisit their initial advice.
“It’s important to document the due diligence process thoroughly and regularly revisit it to ensure that the chosen platform continues to meet the needs of both advisers and their clients.”
Research from Defaqto found that the percentage of advisers who changed their platform provider in the previous 12 months has generally been increasing in recent years, as the table below shows.
Change in preferred platform | ||||
|---|---|---|---|---|
2022 | 2021 | 2020 | 2019 | 2018 |
28% | 19% | 25% | 27% | 25% |
Source: Defaqto Platform Service Review 2023 | ||||
As Ben Hammond, director of consulting at the Lang Cat, puts it, there may be new providers that have not been considered before, “but they may offer the best option for your clients – you don’t want to miss out.”
Chloe Cheung is a senior features writer at FT Adviser
