Platforms must branch out to survive

Platforms must branch out to survive

Recent research from Altus Consulting revealed platforms are still struggling to increase profitability, despite their increasing relevance and role in financial services.

The filed accounts of the top 20 adviser platforms revealed 2013 was a tough year, with an aggregate loss of £6m thanks to a combination of falling margins and rising costs. Margins have, as expected, come under pressure, falling substantially from 50bps in 2010 to 34bps by last year, with more downward pressure likely as more entrants emerge, and existing players cut prices to attempt to get an edge over competitors. The problem is not AUM growth. In 2012 it jumped 20% but, tellingly, revenues only climbed 6%. Costs at platforms will almost always rise because upgrading technology is ex...