New research reveals the amount of platform being used by advisers has declined considerably over the last 10 years.
Back in 2009, planners used 3.5 platforms for new client inflows, on average, but this figure has fallen to just 2.1 in 2019, according to research from Investment Trends.
Investment Trends research director Recep Peker said the platform landscape is changing at pace.
“Post-royal commission, the most cited platform selection driver is now fees, with low overall cost to clients (57 per cent) overtaking efficient admin (45 per cent),” Mr Peker said.
“In addition, industry super funds are growing their usage among planners, with 9 per cent of planners allocating client inflows to industry super fund platforms collectively in 2019.
“As competition intensifies, it is increasingly important for platforms to strengthen their planner relationships since the primary platform captures over twice the FUA allocated to the secondary platform (56 per cent v 25 per cent, on average).”
The Investment Trends research found that the compliance burden remains the top challenge faced by advisers, with 70 per cent of them citing it as an issue.
However, it also found that more advisers are facing obstacles in providing affordable advice (43 per cent, up from 33 per cent in 2018) and reducing the cost of advice (39 per cent, up from 27 per cent).
“Financial planners are striving to widen their pool of eligible clients as a host of macro challenges impact their bottom line,” Mr Peker said.
“For years, planners have struggled to grow their client base as they face a shifting regulatory landscape, the reputational impact of the royal commission and uncertain market conditions. In their quest to lift client numbers and practice profitability, more planners are focused on lowering cost and serving clients in an affordable manner.
“Planners will be evaluating their technology partners, licensee and product set more critically than ever as they seek solutions that best meet the needs both of their clients and their practice.”
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