An increasing number of wealth and adviser firms are looking to ‘launch their own platform’, but while there are several platform vendors offering a variety of compelling solutions in this space, there is no one size fits all approach or structure that can guarantee success (despite claims to the contrary!). Alongside this, there are countless articles in the industry press that swing drastically between heaping praise, or alternatively, predicting imminent disaster, for firms taking the initiative in this area.
Our view is that this approach does not capture the full spectrum of propositional complexity around even the simplest of platform implementations. Of further concern, it promotes a false sense of security that there is a standard set of out-of-the-box platform approaches that can be implemented ‘off the shelf’ by an interchangeable set of homogenised platform vendors. I am sure we have all heard that before!
Taking a step back, the phrase ‘your own platform’ can range from a very simple, white-labelled SaaS based offering, all the way through to a full in-house build, comprising an integrated custody, operations, digital and technology proposition. The key challenge is being able to understand and choose the correct blend of platform functionality, regulatory permissions, retained applications, operational responsibility, and contractual structure, to ensure that the resulting platform solution and operating model are the best fit for your firm’s target strategic proposition, organisational culture, and future ambitions.
Our view is that trying to reduce this complexity into a limited number of buzzword heavy platform models (Adviser-as-Platform, Platform+ etc.) is overly reductive, and it is more insightful to embrace this complexity via a comprehensive framework that encapsulates the essential components of a platform proposition, namely –
- Core Platform Technology
- Digital Front End & Integrations
- Surround Services
- Product Provider
- Custody
- Admin
- Investment Universe
- Branding/Configuration
- Client & Adviser Support
These components can be used as lenses for a ‘deep dive’ requirements analysis (defining respective levels of influence and responsibility), and then re-combined in various configurations to create a unique propositional ownership model that is understood, agreed, and adopted by both the wealth firm and platform vendor to inform and accelerate the implementation engagement.
From the wealth firm perspective, this analysis involves challenging your rationale for embarking on a platform implementation project. Underpinning this is the assertion that ‘defining what is important to you’ is better than ‘taking what you are given’ when it comes to choosing a platform proposition strategy, provider and charging structure.
From the platform vendor perspective, this analysis involves an honest assessment of ‘propositional capability and fit’ i.e., “are there any significant gaps or weak spots in our offering, can we talk confidently to our clients’ strategic priorities, and how can we make the implementation process ‘pain free’ for wealth firms.”
Here is a summary of what to expect over the next few weeks:
- A series of articles describing each of the components that make up and differentiate a platform proposition i.e., the ‘what, why and how’ of each component, alongside the key questions and considerations that need to be addressed when building or implementing a wealth platform solution.
- Case studies from the industry demonstrating several common approaches, the specific challenges inherent in each model, and an assessment of the strategic ‘fit’ between the wealth firm and their platform provider.
- As a bonus, we will head off on a few tangents to explore specific subjects where the framework drives out insights around popular models, common implementation pitfalls, and somewhat inevitably, fees and Consumer Duty!
