We asked Jessica Lyons, financial adviser at Black Swan Financial Planning, to share her experience of platform due diligence.
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At Black Swan Financial Planning our approach is to review our platforms on an ongoing basis.
Alongside that, we’ll do a really thorough rewrite of our documentation every couple of years, but our platform selection is still formally assessed every year.
We use Analyser from the lang cat to do some of the number crunching that goes with that, and that has made life a lot easier.
I remember the early days before we knew we could access a service like Analyser.
You’d have your questions which would be sent off to platform due diligence teams, and you’d just get their standard pack back. When what we actually wanted was for them to answer our questions. Account managers would say our request was a priority, but despite chasing and chasing it just wouldn’t happen.
Having something like Analyser and the insight from the lang cat really helps a lot. It also makes it more feasible to do a standardised refresh – that part of the process becomes much more simplified. What’s more, the questions are specific to us and our clients’ needs.
So the team will meet at regular intervals throughout the year, and if something comes up in between then we’ll catch up and discuss whether anything needs to change. Most of the time the panel might stay the same, but sometimes something will come along that might make you question things.
What prompts a change
Usually if we’re looking to change our panel it would be because we’re being pushed away from our current platforms. For example, where the functionality starts to fall apart, or where we don’t get the right support.
It’s not so much about individual staff, because when you do finally get through to someone they’re as helpful as can be. It’s more that you have to fight to get to that point, and when things go wrong, it’s really hard to get them sorted. Those are the experiences that make you look further afield.
There is also a potential underlying issue around the number of platforms we use that are powered by the same tech provider. It’s not an issue right now, but it might be in the future.
Those are the kind of concerns that we’re aware of in the background. We’re not about to build our own proprietary software, and while there is the adviser as platform model or platforms that allow you to white label, we’re just not convinced yet.
Thoughts on platform due diligence
My personal belief is all due diligence should be in the public domain, and that you should not need to be a member in order to access it.
There are still some platforms where you can’t access that information unless you’re already inside. While you can get it on application, I think you ought to be able to just look. And if a client wants to see what the terms and conditions are of their platform, they ought to be able to just go and find these.
The issue with due diligence is if you go direct to a company, you can get railroaded into their approach and their process. They tell you what they want you to know. And sometimes it can be hard to backtrack and actually get back to what it is that you want to know.
So I always try to start from the opposite way around. Advice businesses will have their own objectives at heart, and crucially, we have clients at heart. So we have to always remember that and keep them front of mind.
The state of the platform market
With the current platform market, we have a lot of solutions that have been created out of necessity rather than true innovation. There are a couple of disruptors, but getting to a place where they have the kind of market capital to really disrupt isn’t going to happen overnight.
There’s an appreciation of the fact that platforms have to contend with regulation and regulatory change, and that will always have to take priority.
But it seems that the tech providers are the ones dictating the way that financial services should evolve, and to me that feels like the wrong conversation.
It should be coming from our side of the business, with us saying: “This is what our clients need.” The providers and platforms can then have the conversation with their tech providers to make it happen. Yet it doesn’t always feel like that’s the way those discussions are actually happening.
Jessica Lyons is a financial adviser at Black Swan Financial Planning
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