Enterprise Platforms - The Platform View

Bradley Northrop, Duncan Ng'enda, Jake Reed, Malak Hassaballa


The existing adviser platform market is facing a number of key challenges which are shaping how advisers think of and use platforms. These challenges include; client’s transformation and stabilisation programmes, ongoing cost pressures, increased competition, growing lock-out risks, and increasing regulatory and operational challenges.

In this article, we look at the threat to adviser platforms of disintermediation by advisers running their own platform. Following the first article of this series, which explored an adviser’s view of the adviser-as-platform model, this article explores the enterprise platform phenomenon from an incumbent platform’s perspective and considers how platforms are responding to this.

We don’t see this topic going away anytime soon. According to NextWealth, one-quarter of advice firms (with over £250m in assets) not currently operating a platform plan to launch one in the next three years (NextWealth, 2023). Furthermore, 17% of adviser firm respondents to the Alpha FMC Financial Advice Survey (Alpha FMC, 2023) cited “securing more of the value chain (e.g. investment management and platforms) is where they see the biggest opportunities for their business in the future.

Should incumbent platform providers be worried?

There are two main reasons why existing platform providers need to monitor developments in this market:

1. Reduced barriers of exit

As highlighted in the first article of our enterprise platforms series, a platform migration is no small undertaking and, for the majority of advisers, will not be a suitable option. In fact, 66% of adviser firm respondents to Alpha’s Financial Adviser survey (January, 2023) stated they would continue to use multiple or a single retail adviser platform in the immediate future. Nevertheless, it would be unwise for any platform provider to assume it will be too hard for their adviser clients to leave. Most platforms carry significant concentration risk due to most of their AUA being attributable to a concentrated group of large advice firms with whom they maintain strategic relationships. It is these advice firms that have the highest propensity to consider adopting their own platform. Even if they do not leave, the tacit threat of them leaving will likely see these firms place huge pressure on their current incumbents for more tailored functionality and service simultaneous to demanding more favourable commercials terms and lower fees.


2. Increased competition

Incumbent providers are now facing an increasing proliferation of new-age enterprise platforms built on modern technologies and philosophies that allow them to deploy capabilities faster and more cheaply than traditional players. In addition, market peers, awake to the threat of enterprise platforms, have been busy enhancing their propositions and expanding their offering into segments that traditionally would be viewed as being outside the realm of a platform provider’s offering, including a wide variety of white-labelling options. The resulting effect is; the competitor landscape is increasingly challenging for all platform providers – further affecting AUA inflows.

How are platforms responding to this threat?

To combat the threat, we are seeing platforms respond in three main ways:

1. Enhancing their white-label capability and support for alternative platform operator models

This shift enables advisers to have varying degrees of propositional control, take an increased cut of the platform value chain and increase personalisation without having to operate and migrate onto their own platform.


2. Providing advisers with additional capability and toolsets

Other platforms are opting to go down a different route and are looking at building additional capability and toolsets for their advisers in areas that traditionally would be viewed as adviser back office or middle office. These enhancements range from additional integrations into CRMs / financial planning tools, enhanced transfer services, and more granular reporting tools to support advisers. These enhancements increase stickiness and differentiation in the market.


3. Providing a bespoke service to adviser firms

We have also seen a shift in service models with platforms opting to create broader consultative services to help advice firms realize the benefits of a strategic platform partner without needing to become the platform operator. Many platforms, recognizing the importance of supporting firms beyond sales and distribution, have enhanced their service offering to deliver some of the benefits that come from a primary platform relationship without the added regulatory and operational overheads.


Do enterprise platform solutions pose a threat to traditional platforms? Our view is that they do. What is evident is that traditional platforms cannot stagnate. If they do, then more agile platform technology providers will surpass them both in terms of technology offerings and back office efficiencies. It is also apparent there will be continued fee pressure in the platform market and, in light of impending Consumer Duty regulations, platforms will need to justify the prices charged through service and functionality or face regulatory scrutiny. If larger platforms struggle to justify their prices, advice firms will seek alternative options.

How Alpha Can Help

At Alpha, we’ve been working with a number of platforms to enhance their propositional offerings, as well as define and implement their strategy, and we’d be delighted to share the insight we’ve gained. If you would like to discuss any of the above topics, please do not hesitate to get in touch here.

About the Authors

Bradley Northrop

Bradley leads Alpha's Retail Distribution and Advice practice, supporting clients to assess their biggest challenges and implement solutions to improve business performance. Bradley has extensive experience in Retail Distribution, Platforms, Financial Advice and Wealth Management supporting a range of business change initiatives

Duncan Ng'enda
Associate Director

Duncan is an Associate Director at Alpha with over 9 years experience working in financial services across Retail and Investment Banking, Wealth and Asset Management, and Insurance. Duncan specialises in business and technology transformation and has extensive knowledge of the UK platform market, leading projects in cost optimisation and digital transformation for several clients.

Jake Reed

Jake is a Manager at Alpha FMC with a broad range of experience across the platforms, pensions and retail investments sector. Jake has experience working on large scale platform transformation programmes and has first-hand experience delivering propositional, regulatory, operational and technology projects across various platform propositions. Jake recently delivered an enterprise platform solution with a national financial advice firm, covering technology implementation, operational readiness and regulatory compliance.

Malak Hassaballa

Malak is an Analyst within Alpha’s Pensions and Retail Investments practice, with experience in complex transformation programmes within the platform market. Most recently, Malak has been supporting a major UK platform business undertake a significant platform implementation as a programme analyst, playing a key role in supporting the project team produce deliverables.