Platforms look to specialise as the advice industry evolves

Analysing 18 of Australia’s leading platforms, SuitabilityHub’s second annual Platform Market Wrap report found that, as financial advisers look to specialise in areas such as retirement, aged care or risk insurance, platforms have begun following suit.

SuitabilityHub managing director Recep Peker told ifa that this trend was likely to continue as platforms looked to align themselves with specialist segments within the wider advice ecosystem.

AMP North, for example, caters more towards retirees, while Praemium focuses more on high-net-worth (HNW) clients and alternative assets, allowing them to home in on their respective specialised segments of the adviser market.

“When we look ahead, I think we expect more specialisation … because it becomes an opportunity for them to differentiate,” Peker said.

“If you have an adviser who says, ‘I really want to differentiate in serving mum and dad clients. I just want to focus on people who are just starting out their young families. They don't have complex needs, but I want to go on a long journey with them’.

“They might end up choosing something where it doesn't have all the bells and whistles. It's a relatively simple, streamlined platform at a much lower cost, which means that, if the platform can help them scale, the adviser business model becomes viable as a volume play, as opposed to just serving a small number of high-net-worth clients.”

In addition to seeing more specialist platforms, Peker suggested that the platform market will expand even further as it becomes easier for licensees to have their own platforms, as seen with the launch of Centrepoint Alliance’s IconiQ platforms in December.

Furthermore, with superannuation funds set to re-enter advice, there are likely to be more platforms emerging shortly to accommodate their needs, creating a more competitive platform market.

“The market is big enough where you can have more players, like the sort of clients and members that industry funds serve that can be an entirely separate segment that coexists with the wrap platform space, or it might be an area where it is seen as a competitive proposition versus wrap platforms,” Peker said.

“So, it just means that the established players in the space, they just need to get clear about their value proposition.”