Platform providers fight for favour among advisers: Report

As advisers search for ways to improve efficiency and reduce operating costs, platforms have needed to actively improve their value offering for advisers through competitive pricing and innovative offerings.

Adviser Ratings’ Advice Landscape 2024 report has revealed the key drivers behind advisers’ decision to switch or stay with a platform, which have become particularly vital as an average of 79 per cent of funds under management (FUM) went through platforms in 2023, according to the report.

“Platforms are currently experiencing a crucial growth phase, with key decision making underway by practices and licensees on their technology stacks, including platforms,” the report said.

Using data collected from 2,747 quantitative ratings and qualitative comments, including sentiment bias, the report revealed that an adviser’s experience while using a platform was the most important factor when choosing between them, with 100 per cent of respondents noting it as a primary consideration in their decision.

Unsurprisingly, this was closely followed by the overall pricing of the platform, with 92 per cent, as the industry looks for ways to reduce operational costs.

Business development managers (BDMs) also proved to be a significant factor as 64 per cent noted it as a key consideration. The report stated that a BDM’s “product, industry, and competitor knowledge, along with ‘on-call’ technical assistance, are essential for advisers considering to stay or switch”.

Other key drivers included client experience (61 per cent), overall investment option (50 per cent), overall functionality (34 per cent), online and call centre support (33 per cent), and the ease of client onboarding (18 per cent).

Among these key factors, advisers found HUB24 to be the top-performing platform across all but one, with CFS Edge taking the top position for overall cost. Netwealth’s platform also proved a top contender, coming in second in six of eight categories, only falling short in client onboarding, being bumped to third by CFS FirstChoice, and overall pricing where it failed to rank in the top five.

Looking at the net promoter score (NPS) among advice platforms, HUB24 has come out on top for the fourth consecutive year with an NPS of 29.3, up from 28.2 in 2023.

Also holding steady for the fourth year was Netwealth in second with 25.3, up from 18.8 last year, the only other platform with a score over 20 this year.

The remaining top four held for the second year in a row with CFS FirstChoice following with an NPS of 15.1, up from 6.7 in 2023, and Mason Stevens with 9.2, up from -2.6 last year. A new platform has taken up the fifth position with CFS Edge sporting a score of 8.1.

Notably, almost all 16 of the platforms included saw an increase NPS this year, with the exception of Macquarie Group, which saw a drop from -18.9 in 2023 to -24.8 in 2024, coming in second to last ahead only of Asgard, which had a score of -37.3, although it is an improvement from an NPS of -45.6 last year.

“Major changes in the industry in the last 12 months have resulted in fiercer competition and improved satisfaction levels with the weighted average net promoter score increasing from -6 to +2,” the report said.

“Apart from the launch of CFS Edge, the other significant milestone in the platform space was the $39 billion migration of MLC Wrap and Navigator in March to Expand by Insignia.

“Ratings for the MLC platforms and One Path improved during the survey period – the uplift in scores was primarily due to comparative statistical weightings from prior years and a slight halo effect with the impending Expand migration.”