More than two-thirds of advisers are worried about reduced levels of service in the event their platform undergoes consolidation, research has shown.

A survey by CoreData Research found the possibility of reduced service levels post-merger was the primary concern of about 67% of respondents – equating to about 16,000 UK advisers.

Some 83% – or 19,800 advisers – indicated they would move assets to another platform should there be any changes resulting in lower quality of service.

The survey was carried out shortly before last week’s announcement that Aegon bought Cofunds from Legal & General for £140m. It had asked 1,000 UK-based advisers.

Almost two-thirds (62%) showed concern towards platform mergers and acquisitions as a whole, as there were worries that consolidation might affect their main platform.

The CoreData study also found the majority (53%) of advisers were worried about the increased cost to their firm post-consolidation of their platform, with some 85% saying such an event would trigger a transfer of client assets away from the merged or acquired platform.

Prolonged Consolidation

More than half (54%) of advisers said they would stop registering new assets until due diligence was carried out on the new entity.

This suggested adviser business on platforms could stall should the Cofunds deal trigger a prolonged period of platform consolidation.

CoreData Research senior consultant Will Roberts said: “Platforms are finding it more difficult to achieve scale amid the demands of regulatory compliance, margin pressures and digital disruption.

“The economic fundamentals would therefore suggest that the Cofunds deal could be followed by a period of prolonged platform consolidation at some stage in the near future. And our research indicates this would constitute a significant area of concern for advisers.”


Published 16 August 2016
By Victoria McKeever
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