Investment Platforms: Approaches & Challenges with Orphan Clients

Bruce Davies, Hattie Elkins

The topic of orphan clients has been receiving an increasing level of interest from the FCA over recent years. To better understand how the industry is responding to this issue, Alpha surveyed a range of large and small UK adviser platforms to understand the size of this problem, as well as platforms’ means of identifying and treating this population. Our respondents provided some insights which, along with the ongoing FCA guidance, provides something to think about for the market as a whole.


It is clear that this problem is not going away: our analysis concludes that the number of orphan clients is trending upwards, and the regulator has committed to conducting further analysis at firm-level where they may have concerns over an inadequate response to orphan clients. Whilst on paper, the industry is currently performing the right activities to deal with this client population, platforms must consider: if the regulator conducted a more thorough review of your practices today, would they walk away satisfied?

The industry trend is to deliver a reactive strategy, as opposed to proactively identifying and seeking a solution for orphan clients. On the whole, it appears that much more could be done to ensure that no clients are negatively impacted by being


orphaned. As the industry continues to evolve and adviser platforms start to deliver improved capabilities and experiences, the benefits will be felt by the end-customer. This ultimately not only helps the relationship between the platform and adviser, but also that between adviser and client.

The required response to orphan clients can therefore also be viewed as an opportunity, to increase the quality of both client monitoring as well as the ongoing communication methods with advisers. This functionality shouldn’t be considered in isolation with this topic, but with the viewpoint that improvements to these capabilities would unlock wider positive business impacts beyond just the subject of orphan clients.


Alpha’s Orphan Client Survey

To review how the industry is currently responding to these questions, Alpha have performed a study with a range of large and small platforms in the UK market.

The survey comprises a selection of quantitative and qualitative questions to explore:

  1. How platforms are defining orphan clients
  2. The size of platforms’ orphan client populations
  3. The approaches and responses adopted by the industry

All responses have been anonymised and collated.


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About the Authors

Bruce Davies

Bruce is a Director and co-lead of the Pensions & Retail Investments practice at Alpha. He has a particular specialism in investment platforms, focusing on end-to-end performance improvement, from digital, through core operations into investment management. Bruce has advised clients and suppliers on all aspects of platform business, including market entry strategy, M&A, transformation, outsourcing and re-platforming.

Hattie Elkins

Hattie is a Consultant at Alpha in the Pensions & Retail Investments practice with over four and a half years’ experience in Financial Services consulting. Hattie has delivered a number of strategic change and transformation projects, including operating model design, distribution strategy and M&A strategy. She has worked with a range of clients across the pensions and retail investments and wealth management sector.