One only has to think of the Aegon/Cofunds platform debacle of 2018, which dragged on for months. In that case, Aegon's purchase of Cofunds turned into months of problems and delays, which in June of that year alone cost the business £3m to put right.
Getting that transition and replatforming right is of utmost importance, so while 7IM's Kenny agrees that consolidation will be driven by market dynamics and synergies by company capability, she adds: "These will only prove successful if they lead to better consumer outcomes."
Future improvements
Back comments: "We are seeing increasingly greater investment in new technologies and this will only accelerate in the coming years."
However, he adds: "Innovation needs to respond to consumer and client demands. Advisers should have confidence in the quality of data and the availability of data to empower the end-investor to help make smart decisions."
According to him, advisers are increasingly opting for the collective scalability of outsourced partners to deliver them private-label industry-leading solutions, which are likely to encompass areas such as machine learning, robotics and enhanced data sourcing/aggregation, all through simplified communication channels.
The next phase of innovation is likely to be data driven as platforms harness their increasingly rich data sets to better understand their customers and to create products and services that are designed with a known customer need in mind.
This should result in greater personalisation of their propositions, according to Mill, but he fears such digitisation – which people hail as the "next big thing" – is a long way away from becoming a reality in the platform world.
He says those platforms that rely too heavily on third-party technology, and who cannot be flexible enough to digitise their proposition effectively, will find they cannot adapt to whatever the regulatory environment, pandemics and advisers demand of them.
Product additions
Clients may see platforms start to add more esoteric products, although if the pace of change involved is anything like the move to add investment trusts onto platforms (which I started writing stories on in 2004 and was still doing so in 2018), then maybe that is another slow burner.
But with infrastructure and cryptocurrencies and now NFTs all coming into their own, it may not be too long before regulators start approving related financial services products for retail investors in the UK.
Indeed, as Back says: "Custodying cryptocurrency is technically possible today for an institutional platform, albeit working with a third-party partner."
Once the Financial Conduct Authority gives the green light, the reasons for not meeting client demand with such products will become thinner.
