Platform Service in the Digital Age

We already know service comes out as one of the top attributes in advice firm feedback on platform selection. Our research provides additional insight into how advice firms now think about platform service and how their expectations and those of clients are driving a recurring innovation cycle.

Qualitative Research: We conducted 15 interviews with UK advice firm professionals, including 7 financial advisers and 8 paraplanners. *

+ Platforms have improved, reducing the number of service touchpoints

• Advisers and paraplanners recognise the improvement in functionality that platforms now provide, especially since COVID, which accelerated a trend towards greater digitisation and automation.
• They agree that a range of once time-consuming tasks are now quicker and simpler, processes are more efficient and streamlined (e.g. onboarding, customer dashboards, valuations and adviser remuneration are integrated with their back-office systems reducing the need to rekey data).
• As a consequence, they are having to contact platform support teams and account managers less than before. 

“Platform enhancements have definitely 100% enabled an increase in prospecting new clients, doing more reviews, that sort of thing. It has reduced the admin side and we can now do more of what we are supposed to do.”

+ While servicing effort has moved to advice firms, it’s given them greater control over the client experience

• Advisers and paraplanners acknowledge that one consequence of the digital transformation of platforms is that some of the servicing effort that historically sat with providers has effectively moved to advice firms.
• They see this as a net positive, however, as it affords them a greater degree of control over the client experience.

“Things are getting easier and quicker because the problems are now getting ironed out and it is more seamless.”

• For instance, digital letters of authority mean there is no need for wet signatures allowing platforms to take instructions on portfolios from advisers.
• Processing issues are also flagged during transactional journeys at the input stage where they can be identified quickly and resolved.
• This ultimately gives advice firms more confidence in servicing their clients as they have greater control and foresight of a more streamlined client journey.

“There are checklists and the platform keeps you straight, if you’ve got a cautious investor, it tells you if you’ve gone too high risk and so on.”

+ Digitisation has efficiency gains… but these are being negated by a heavy regulatory compliance burden

• Platform digitisation, automation and integration have improved advice firm workflows and enabled firms to become more proactive and less reactive.
• Advisers report that they have more time to contact clients and research alternative solutions.
• There is also more time to focus on new business by following up on referrals and it has also resulted in the ability to serve a greater number of clients.

“Platforms might be easier to use, but it is too simple to say they’re making my life easier, especially as compliance has increased.”

• However, while acknowledging positive impacts, advisers and paraplanners feel that ‘time saved’ is being taken up in other ways.
• Principally, by the heavy burden of evidencing compliance under Consumer Duty and dealing with changes to savings regulations, such as the LTA.
• This, and the fact digitisation is enabling them to see a greater number of clients is leading some firms to recruit administrators and paraplanners.

“The amount of time spent on compliance has increased massively and that adds up to a significant cost in time and resource.”

+ Productivity has been boosted, but business models have not really changed

• While advisers report several positive impacts on productivity including greater ability to serve more clients, this has not changed business models materially.
• Advisers are still focusing primarily on high-net-worth clients; these clients drive higher revenues and profit margins.
• Consumer Duty has driven up the cost of servicing lower-value clients, making borderline clients uncommercial, and encouraging advisers to increase minimum portfolio amounts (for example to 100K or 150K).
• Advisers will either charge a higher fee to make these clients viable or encourage them to self-serve. They may make exceptions for family members of clients, either charging a fixed fee or giving free advice out of goodwill.

“With legacy clients £30-70k, we don’t make any money out of them.  We are just not interested in offering fixed fees, it doesn’t work for these people unfortunately as you still need to go through the fact find process, write a report, compliance etc.”

+ Service is still a critical differentiator 

• Advisers and paraplanners believe that platform service encompasses the platform user experience and the efficiency of the platform functionality. How well platforms work directly impacts the level of service that advice firms can provide to their clients.
• Platform service also covers what happens when self-service or normal processes don’t work and human support is required, and in these scenarios they expect platforms to be responsive. 
• While service touchpoints have reduced, the ability to contact a responsive service team or an account manager is still as important as ever it was.
• Advisers see ‘great service’ as satisfaction with both the efficiency of the platform and the ability of the human support to resolve issues when needed.
• They see it as a primary attribute of platforms alongside cost and value and a key differentiating factor in choosing and using the platforms they work with.
• One consequence of self-serve is that advice firms need to ensure they keep abreast of updates and participate in training when necessary to fully use the existing and updated functionality on platforms.

“When it comes to platforms I don’t think there is that much difference between them, so it comes down to cost obviously and the support and people.  Our clients want really good service so we need someone who can back it up.”

+ As platforms have improved, expectations have also moved higher

• As platforms have delivered enhancements and straight through processes, it has raised user expectations about what is possible.
• Advisers and paraplanners often use several platforms at once and can identify where one platform has a transactional journey that is more streamlined than the others. This then becomes the gold standard others must match.  
• Consequently, platform innovations repeatedly raise the bar and ‘what good looks like’ becomes an ever-evolving concept.
• Platforms need to continually invest in order to deliver ongoing improvements in automation and connectivity to help advice firms scale their businesses efficiently so they can meet the needs of both the regulator and their clients.

“Clients are generally happier that things are being done more quickly and efficiently. But we have to continually justify what they are paying us for, so we’re using the time to look at solutions for their money.”

The adviser-platform innovation cycle

Summary

Platform service is a moving target that is difficult to assess independently. Our research suggests it represents the satisfaction with the full experience of using a platform: a combination of the digital functionality and the people that stand behind that ready to help.

Greater automation of administrative tasks has granted advice firms greater control over the client experience and boosted productivity, but the heavier burden of compliance has eaten away ‘time savings’. While the number of touchpoints has reduced, people remain as important as ever when they are needed, and they remain an important source of differentiation between platforms.

As platforms have improved, adviser and client expectations have moved higher in lockstep as the bar is continually raised. This is creating a recurring innovation cycle where regulatory pressures and client expectations are forcing advice firms to be more efficient, which is in turn pushing platform providers to innovate and support their advisers to efficiently scale their businesses.

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

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