Platform consolidation raises competition concerns, adviser study finds

Over three in five (61 per cent) financial advisers are expecting platform consolidation to accelerate over the next three years, research by Scottish Widows has shown.

The figure increased to 75 per cent for firms managing more than £500m.

Scottish Widows reported the findings in its latest Investor Confidence Barometer, which was based on a survey of 1,001 UK consumers with a minimum of £100,000 investible assets.

The research also revealed that 92% of advisers believe platform competition is important for client outcomes, 72 per cent recognise the importance of niche providers, while 35 per cent said they are worried about the extent of platform consolidation.

Sixty-two per cent of advisers said the collapse of a platform would impact their business, with 23 per cent strongly agreeing with this sentiment. More than half (52 per cent) of advisers also said they were concerned about increased private equity ownership of platforms.

Intermediary wealth director at Scottish Widows, Jenny Davidson, said: “Competition is good for advisers and clients. It keeps the market vibrant, driving innovation and a focus on good outcomes and value.

“However, the market is currently suffering from pressure on revenues and increasing costs from managing regulatory change and investing to meet the increasing expectations of advisers and their clients. Platform consolidation feels inevitable.

“The risk for advisers is their platform of choice becoming collateral damage, leading to a constrained and less competitive sector. This further emphasises the importance of picking a platform that is financially strong and committed to a future in the market, with a clear roadmap for growth.”

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