Platform switching on the rise

By Jayson Forrest - Managing Editor  - IMAP Perspectives

This was one of the key findings from the Investment Trends 2020 Planner Technology Report. 

Now in its 17th year, the report found that platform relationships are being challenged by the twin headwinds of the Financial Services Royal Commission and the global coronavirus pandemic.

“Not only has platform switching reached a post-GFC high, advisers are also broadening the range of platforms they use. The average adviser uses 2.6 platforms each, reversing the consolidation seen in the last two years (up from 2.3 in 2018 and 2.1 in 2019),” said Investment Trends Research Director, Recep Peker.

“In the face of pandemic-induced market volatility, advisers are relying heavily on platforms for high quality service and support, with minimised service disruptions,” Peker said.

The research found that across the industry, advisers were mostly satisfied with the support provided by their platforms through the COVID-19 pandemic, with 77 per cent rating it as ‘good’ or ‘adequate’. However, with almost one-quarter (23 per cent) of respondents saying they were ‘dissatisfied’, Peker said there was room for improvement.

The 2020 Planner Technology Report shed some valuable insights on how the COVID-19 lockdown had transformed the way advisers communicated and engaged with their clients, which had accelerated their adoption of digital-based tools.

“Since the start of the lockdown in early March, advisers have significantly expanded their use of online meetings, email campaigns, digital signature tools and social media management systems,” Peker said. “Whether by choice or circumstance, advisers are adapting their technology stack during these unprecedented times.”

While the report found that most advisers (82 per cent) believed the core of their technology stack – the platforms and advice software they use – were strategically important for the success of their business, not all advisers were convinced they were using their tech stack to its full potential. Across the industry, one-third of advisers did not believe their platforms and planning software effectively helped them demonstrate value to clients, while 38 per cent did not believe they helped boost business efficiency.

“Advisers trust their technology providers to help them improve the quality of their advice delivery, and providers can do more to satisfy their high expectations,” said Peker.

“A key first step is improving the online client-facing capabilities available to advisers and their clients. For instance, advisers currently give just 40 per cent of their total client base access to an online portal, but they want to expand this capability to more clients, with 44 per cent preferring all their clients to have online portal access.”

The report found that in 2020, Netwealth remained the highest rated platform by overall satisfaction, with 96 per cent of primary users rating their overall satisfaction as ‘good’ or ‘very good’. In second place came HUB24 (89 per cent), followed by CFS FirstChoice, BT Panorama and Macquarie Wrap.

In terms of adviser satisfaction with their primary advice software, for the fifth consecutive year, AdviserLogic came in first, followed by Midwinter and Xplan.

“Despite macro headwinds, industry wide overall satisfaction with both investment platforms and advice software providers increased for the first time since 2014,” said Peker. “However, many satisfaction gaps remain in both parts of the value chain. To stand out, providers need to identify and refine the service areas that matter most to their users.”

The Investment Trends 2020 Planner Technology Report was based on an in-depth online survey of 693 financial advisers concluded in May 2020.