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Platforms – Pre and Post RDR Survival of the fittest

Platforms – Pre and Post RDR Survival of the fittest. @ascentric_mike. FOR PROFESSIONAL ADVISER USE ONLY. Drivers to platform. Investment choice – started by Fund Supermarkets Asset consolidation – creating value Business efficiencies, de-risking though consistency of process

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Platforms – Pre and Post RDR Survival of the fittest

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  1. Platforms – Pre and Post RDR Survival of the fittest @ascentric_mike FOR PROFESSIONAL ADVISER USE ONLY

  2. Drivers to platform • Investment choice – started by Fund Supermarkets • Asset consolidation – creating value • Business efficiencies, de-risking though consistency of process • Reducing the cost of saving • Low cost faster internet access • Mobility of end customer • RDR

  3. Pre RDR Complex picture

  4. Structured Products – VCT, ITs Bonds ETFs Equities Cash Collectives Market offerings Assets True Open Wraps Provider Platforms Fund Supermarkets ISA / GIA SIPP Offshore Bond Onshore Bond Trustee Tax Wrappers

  5. Pricing models - Bundled Pays annual management charge of 1.50% Private Investor IFA Platform Fund Manager Retains 0.75% Rebates 0.25% Pays 0.50% commission

  6. Pricing Models - Unbundled Pays annual management charge of 1.50% Private Investor IFA Platform Fund Manager Retains 0.75% Pays 0.25% fee Pays 0.50% Adviser fee Rebates 0.75% Cash account Where will the FSA land?

  7. Operating models – Own Technology/Admin

  8. Platform penetration to date Investment Platform Study 2011 by Core Data • 90.7% of those surveyed use a platform • Over 50% using 1 or 2 platforms • In excess of 40% use them every day • 20% of advisers likely to add a platform in next 12 months • Just over 16% on recurring fees • 40% expect a rise in assets to main platform

  9. Commercial pressure • Largely sales driven businesses • Massive capital expenditure • Just 4 profitable platforms • Big brands fallen • Yet more new entrants • Unsustainable business models?

  10. Post RDR Evolving Picture

  11. B2B2C Adviser charging Collaboration Comparisons Competition Corporate Wrap Consolidation Investment Integrations D2C DFM Legacy Assets Margins Multi-platform propositions Pricing Profits New entrants Open architecture Re-registration Rebates Restricted Service Technology Stockbroking Important not to lose site of end client needs as market develops

  12. Making sense of it all Started the market Control whole experience Strong brand Limited initial capability Rich content and capability Third party operating system Traded on low pricing Fewer integrations (apps) Innovators Struggled to innovate since Less profitable model Wide choice of services (apps) Fund Supermarkets Ascentric Provider Wraps

  13. Questions when debating platforms? • What are you buying when you take on a platform? • How flexible is the solution to meet my needs today and into the future? • What is the service operating model and performance – have you been to see the “factory”? • How can they demonstrate strength and sustainability? • Do the costs represent value for my clients? • Are the terms suited to my client segmentation? • Is the product and investment choice sufficient? • Does the provider have momentum behind them?

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