Article What will platforms look like in the future?

From the simple fund supermarkets of the past, to the multi-tooled and all-encompassing services of today, the platform market has undergone significant evolution since the turn of the millennium.

One thing that hasn’t changed, though, is the importance of platforms and your platform strategy to offering an advice proposition that provides clear value to you and your clients. However, making sure this continues to be the case means keeping one eye on the future too.

To help you keep up-to-date with everything platforms, we’ve sponsored NextWealth’s Platforms Unpacked guide – a comprehensive deep-dive into the opportunities, benefits and risks associated with managing your platform.¹ Based on the guide, this article looks at how platforms could continue to evolve over the coming years, supporting you to plan forward and stay ahead of the game.

• How have platforms changed?
• What are the most popular platform models?
• How could platforms change in the future?

How have platforms changed?

The evolution of the platform market has been the result of years of gradual change, driven by new demands in terms of what clients expect, the needs of your business, the rules implemented by regulators, and the wider transformation of the digital landscape.¹

In the ‘90s, platforms offered limited functionality and primarily acted as a way of conveniently accessing a small variety of funds in one location. Across the ‘00s, they began to offer tax-wrapped solutions, different tools, portfolio management, cost comparisons, and clearer charges.

A digital revolution came in the 2010s, with re-platforming to support future growth, new client portals, easy-to-use data analytics, integration with CRM systems, and the rising use of platforms as a system of record for compliance. Today, we see a market that offers a variety of unique, digital-led platform models that cater for almost all types of advice.

In terms of the drivers behind today’s platform market, the factors are many and varied. Consolidation within the advice industry has inspired a need for at-scale solutions, technological advances have expanded digital capabilities, and adviser demand for better integration has streamlined data processing. Further developments in these areas, alongside entirely new demands and innovations, are likely to continue pushing platforms forward too.

What are the most popular platform models?

There are now many different platform models available to advisers, with some even choosing to employ more than one as part of their efforts to meet differing client needs.

According to NextWealth’s research, 47% of advisers utilise an outsourced platform with no firm branding attached – the most popular choice, but down 15% on the results published in 2023.¹

Second place was occupied by the use of a branded portal that sits on top of an outsourced technology solution, with 26% of advisers using this model and up by 3% on the previous data.

The biggest growth can be found in the proportion of advisers managing their own fully-customised platform in-house – third overall, but up to 16% from 5%.

Finally, the fourth spot went to fully-customised platforms that are powered by an outsourced provider who holds the regulatory permissions – up from 7% to 11%.

With so many different options being used to a significant extent across the advice industry, the importance of implementing a platform strategy that suits your clients and your business is becoming even more apparent – both for the now and the future.

How could platforms change in the future?

As your needs change and new standards are set, you’ll want to keep up-to-date with any further evolution in the platforms market as and when it happens. For now, we can try to envision what the future of platforms holds, to help you build a picture of how your platform strategy may need to adapt over time.

Overall, NextWealth project that the platforms of the future will move beyond being tools for safeguarding assets – and become service-driven hubs that are efficient, reliable in their investment administration, offer a high-quality service, and feel personalised in an increasingly commoditised market.¹ In doing so, they’ll possibly exhibit four main characteristics:

Data integration

Data processing is all about inputs and outputs. In the future, platforms could be automated to constantly take in new data, and provide advisers with valuation and transaction outputs that make use of note-taking capabilities to facilitate reporting on client assets in one place and without the need for custody of those assets.

Smarter client visibility

Rather than trying to house every asset type, platforms could switch to building integrations with other systems that already hold them, allowing platform providers to focus their resources on improving service and connectivity. This could possibly enable clients and advisers to view total wealth in one place, whether through the platform or back office.

Hybrid advice models

With new breakthroughs in artificial intelligence seemingly announced every day, the discourse around and development of robo-advice is likely to go from strength to strength. At some point in the future, we may see platforms that support hybrid advice approaches, blending traditional adviser-led models with robo-advisory capabilities in one cost-effective solution.

Regulatory and data-driven compliance

Even before Consumer Duty, data as a tool for regulatory compliance was becoming a vital cog in the advice machine. The increased attention given to and demanded of client and product data could lead to platforms leveraging new data-enabled compliance tools – including those that automate and evidence suitability reviews, stress testing and reporting.

Getting the most out of your platform

Understanding how you use your platform, or hope to use it in the future, plays a big part in supporting you to offer the best advice possible for your clients. For ideas as to how you can improve your platform strategy, check out our article, 7 steps for building an effective platform strategy.

To make sure you’re up-to-date with the latest happenings and trends in advice, you can visit our Insights hub for more helpful content.