There are other interesting implications here. Many companies, when operating a primary/secondary platform strategy, mention diversification of provider as a form of risk control. But if the underlying technology is shared, that risk control might not be as strong as imagined. And a firm that has picked, say, Standard Life Wrap and Novia, may find in a few years that both are more common under the hood than not. It’s a bit like banks merging – you thought you’d spread your money around to maximise protection, but it turns out it’s all in Lloyds Banking Group after all.
Advisers looking for different models may want to look at Transact, which does its own thing, Parmenion, Fusion Wealth (with SEI in the background), Multrees, True Potential, Seven IM (Pershing), James Hay, Hubwise or Seccl/Octopus. Models vary quite dramatically between these platforms – we’ve talked about that before in this column – but there is plenty of choice.
One wrinkle in this landscape to consider is that we are already seeing a sort of sub-tenant market starting to develop. This is what SEI has done for a long time with Fusion, True Potential and others – though True Potential is now exiting its SEI relationship. In this model, you sign up with the tech provider, and then get other advisers to sign on with you – normally through a consolidator or network model. That’s exactly what Seccl/Octopus and Hubwise are doing with their own technologies – and it’s what Embark is doing with FNZ, too.
What does it all mean? You form your own views. For sure there is consolidation and some attaching risk, but when you take a wider view of the market I think there’s still plenty of choice for those who want to take it.
Mark Polson is principal at the Lang Cat
