Financial software

Why platform consolidation is helpful for clients and advisors

Posted by MoneyController on 22.03.2021

Paul Hogarth recently explained how the recent acquisition of Nucleus by James Hay is likely to bring more consolidation in the platforms sector and improve the overall quality of the platforms that advisors have access to today. With platforms representing an integral part of the future of wealth management, smarter and more focused platforms will be welcomed by all in the industry.

What do advisors look for in a platform?

Advisors primarily look for the following benefits in using a platform:

  • Good UI functionality that integrates seamlessly with their business

  • Reliable, robust and secure technology

  • Responsive service and support

  • Value for money

Due to market crowding, platforms do not adequately focus on these core elements and instead opt to broaden their service offerings and add in widgets like writing tools and office apps. These tools do not provide much added value and many are merely decorative items to go with a platform. 

According to Paul Hogarth, what these platforms should instead focus on is scale. This would allow them to offer the best value for money and absorb costs even when they rise. Moreover, it would give them the ability to balance human responsiveness and technical support that many companies need. With such tools at hand, advisors will feel that their needs are being fulfilled and won’t go searching for alternatives.

James Hay acquisition of Nucleus

James Hay recently acquired the adviser platform Nucleus in a deal worth 145 million pounds. The acquisition will help bring more stability to Nucleus, already a very popular platform among advisors. The transaction is backed by a private equity fund with vast resources - resources that will help the company unlock its true value and deliver even better services to advisors.

Hogarth explained that as more investment moves into the platforms sector, the resulting competition is likely to improve the overall quality of platforms. This means more consolidation in the sector. In the coming years, we may see only a handful of firms offering platforms that are good enough for advisors. This may mean more re-platforming, but that process should become easier as more and more firms start investing in their platforms. In the long run, this will also help lower prices -  something that the advisors and their clients will surely welcome.

 

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