What do advice firms really want from their platforms?

An adviser’s guide to platform selection, switching and onboarding

What do advice firms want from their platforms and what drives them to switch? How much of moving platforms is due to push factors in the form of pain points at their current platform? And how much of it is due to the allure of pull factors at a new platform? Also, what does a great onboarding journey look like and how much can that help with the decision to switch?

Qualitative Research: We conducted 15 interviews with UK advice firm professionals, including 11 financial advisers and 4 paraplanners.*

Choosing a platform

+ High openness to switching

There is a high degree of openness among advice firms to considering new platforms. They recognise that switching involves considerable time and effort, but they will switch if it is beneficial for the client.
While open to considering new platforms, the reality is they will test the water by initially placing small amounts of business on the new platform.

“It involves work and it might be a pain, but if the reason to do it is beneficial, you do it.”

+ But there must be a push trigger

The switching of significant volumes of business is less common and typically happens when they are also unhappy with their current provider.
Advisers effectively consider a client-centred cost-benefit analysis that weighs up the push factors at their current platform as well as the advantages that a new platform could offer.
Push factors, such as higher charges or reduced service on their current platform, tend to have more weight in their analysis. If these issues reach a ‘tipping point’, it becomes the trigger to take action.
Since moving platform is relatively ‘hard to do’, it requires high motivation on the part of advisers to trigger action. That said, if platforms can show advisers that moving is easier than they expect, this trigger point for action is reduced.

“There has to be a really good reason to switch in the first place: ongoing issues with the platform we’ve been using.”

+ Service & functionality are the most important push factors

The most significant push factor in encouraging switching is ‘significant service and support issues’ at their current platform since it can harm relationships with clients.
Lack of accountability or trained support, lengthy call times, processing delays, or problems with transactions, adviser fees, or income payments are some of the most common frustrations.

“It’s customer service that wins, it’s massively important, and you want to keep these clients a long time if they have a pension with you.”

The second most important push factor is poor or ageing functionality that results in advisers having to contact support. Easy-to-use, modern functionality is a seen as a strong reason to stay but platforms must invest to keep up.
If the platform becomes clunky to use or inefficient, this can become a significant push factor. Poorly executed tech upgrades can cause slow response times and platform outages that can become frustrating for advice firms, so much so that it triggers a move to another platform.

“If there’s a change and the software isn’t as good, it’s not compatible with your back office, or the service is poor, that’s a problem.”

+ Platform charges are no longer a key influence on switching

Platform charges have come down in recent years and are now felt to be ‘much of muchness’ across the industry.
Advisers weigh up charges against a range of other factors that determine overall platform value for money. It’s not just about being the cheapest.
Platform charges make up a relatively small portion of the total cost of advice, versus adviser and investment management fees.
If cost differences between platforms are minimal, advisers must weigh up the time & effort involved in switching and decide whether there is a benefit.
Access to tiered charging structures or volume discounts does play an important role in the allocation of larger portfolios.

“Charges have become more transparent, and… reduced across all platforms. It’s a lot of work to switch platforms, so I’d also consider whether it is worth moving for a charge which is only fractionally lower.”

What are the key pull factors in selecting a new platform?

+ Advice firms use a layered approach; financial strength seen as mandatory

The first layer considers the core platform offer and functionality as well as the range of tax wrappers and investments, all of which advisers consider mandatory or hygiene factors.
Advisers believe that platform financial strength is also a core factor in the light of Consumer Duty. They say the safety of assets and the platform’s ability to invest in technology and the ongoing support model is non-negotiable.

“You need the financial strength for compliance and Consumer Duty, but we wouldn’t touch someone who didn’t have it anyway.”

The second layer considers greater differentiation around factors like the service and support model and the onboarding journey, the level of platform integrations to the adviser’s back office and the platform user experience.
Advisers say that a good platform: has an intuitive front end that allows them to run multiple tasks; provides access to a dedicated contact or support to resolve issues and; ultimately helps them to deliver a smooth service to clients.

“If it didn’t integrate with our back-office system very well, that would be enough to say…we’re probably not going to use them going forward.”

+ Onboarding seen as a critical bellwether of platform service and commitment….

Onboarding is considered one of the most important aspects of platform service since it is the first experience of advisers and clients and can sour client relationships if it goes wrong.
Cost is a consideration but typically within a broader ‘value for money’ context that also considers service and ease to use functionality.
The third layer considers what are essentially ‘nice to haves’, such as access to technical expertise and on-platform tools. These are recognised as valuable services, albeit not core and there may be overlap with in-house resources.

“You’ve got to get onboarding right, if you fail at the first hurdle that is simply no good because that’s the first experience you have with a platform”

What are the key pull factors in selecting a new platform?

+ Disruption to back office and uncertainty over onboarding are the top barriers

The biggest barrier to switching to a new platform is the disruption to back-office servicing that it involves, particularly where there is already a working level of compatibility between the current platform and the back office.
The implied cost of switching is also a key factor since there is a cost in advice firm time and effort in switching to and learning to use a new platform.
Any indication that switching would materially reduce the service level provided to clients, beyond acceptable teething problems, would be a barrier to action.
While out-of-market risk has the potential to negatively disrupt the client experience, it is not as great a concern as it was a few years ago due to improvements in platform processing and the greater use of in-specie transfers.
Advisers concede that familiarity with the current platform can breed inertia. However, they also believe this can be overcome.
Platforms that can offer a range of CRM integrations and a smooth onboarding journey can alleviate many of these concerns.

“Whatever happens, you don’t want to aggravate your clients”

What does a good onboarding experience look like?

+ ‘’A good onboarding journey reflects well on the brand’’

Onboarding should offer multiple layers of support to advisers & paraplanners at the right moments, with clear accountability and lines of communication.
It should be a phased, partnered approach rather than ‘a one and done’ with support continuing for some time beyond the initial onboarding of clients to deal with queries, provide refresher sessions or give training on new features.
A good journey should be tailored to the advice firm needs, particularly when it involves large numbers of clients.

“Communication is key, there’s a lot of people to deal with. If they aren’t good at communicating with each other they’ll drop the ball.”

Advisers accept issues will arise so there is a preference for people-based support over tech-only models and/or automated chat-bots, which can be seen as unhelpful cost-cutting measures or lacking in commitment.
A business development manager is typically appreciated as a dedicated overall contact, and when getting into detailed onboarding/platform training, a platform onboarding consultant is also appreciated, especially for larger cases.
A good journey should offer a range of channel options for support delivery, including initial face-to-face meetings to build relationships and online meetings, demos & webinars for detailed platform training.
Phone & live chat support with screen sharing is preferred for resolving specific platform issues or getting help with less commonly used processes.

“If you’re switching large volumes over you need a dedicated contact. It’s a lot of work, a lot of admin, you need regular updates, you need to explain and justify to all the clients what you are doing”

Summary

Advice firms are open to using new platforms as long it’s in the interest of clients. Some firms will test a new platform with smaller amounts of business. Switching larger amounts of business is a more involved exercise and potentially disruptive to their client experience. Advice firms will do as much due diligence as they can, but ultimately they have to make a cost-benefit judgement based on the existing and potential client experience.

Since moving platforms is a high ‘cost’ decision for advice firms in terms of their time, administrative effort, and potential risk to the client service, it invariably requires a ‘push’ trigger in the form of pain points at their existing platform. Reduced service or poorly upgraded platform functionality are the biggest triggers here.

For more information on onboarding at Scottish Widows Platform, please see our Partner With Us page.

* Research was carried out in April 2024 with UK advice professionals at firms with assets in excess of £15m.

Analysis

“Our research shows that the onboarding journey is seen as a strong bellwether signal into the support model and commitment of a new platform. By extension, it should also be a key criterion for advice firms in platform reviews. The platforms that can demonstrate a differentiated onboarding journey, combining great technology with expert people in support, can ease adviser concerns and lower the barrier to switching by building a positive reputation within the advice community.

Onboarding to the Scottish Widows Platform is a slick and seamless technology-first process, which is supported by skilled people with the ability to tailor the experience to advice firms’ needs. New advice firms benefit from a Business Development Manager as an overall contact point and a Platform Onboarding consultant who develops a tailored platform training plan, backed by responsive platform support via phone and live chat.”

Ranila Ravi-Burslem, Intermediary Distribution Director, Scottish Widows