It’s not your fault but it is your problem.

That was the subtitle of our Platform Shakeout report this week. It’s been a busy week for the team at NextWealth. We published two reports:

1. Platforms Unpacked – a guide for advisers on platform selection. The guide is free thanks to the generous support of Embark Platform Third Financial P1 Investment Services and Aegon UK.
2. Platform Shakeout – a paid for market report on the platform market. The subtitle – “It’s not your fault but it is your problem” is addressed to third-party platform providers. Many platforms do a lot of things right. They pay out income on time, they hold safe custody of client assets, they pay adviser fees, etc. But some are falling short.

Platforms are held back by the worst among them. Most advice firms wouldn’t choose to become a platform operator. They wouldn’t want the extra regulatory overhead for a few bps. But because some are falling short, it forces a decision. The decision isn’t among the existing lot of platforms but starts by considering the model (i.e. fully outsourced third-party, model-b, etc.).

One advice firm we spoke to was delighted to have managed 85% valuation and transaction level data. This PE backed consolidator has worked for months to achieve this. Some platforms still don’t provide the firm with valuation and transaction level data. This is essential for reporting to clients, the regulator and to shareholders. It’s ridiculous. It’s just not good enough.

That’s why a growing number of consolidators plan to launch a platform in the next three years. The data don’t lie:

NextWealth: Platform Shakeout: It’s not your fault, but it’s your problem – February 2025

So, while for some platforms, it may not be your fault -it is your problem. Because some can’t (or won’t) step up to the challenge of supporting advice firms in the way they need to be supported, this is pushing a growing number of firms to reconsider their platform operating model.

In the report we share six actions platforms can and must take to remain relevant for the future. To find our more, download a sample of the report here or get in touch by clicking here.

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