In times of change, it's important to keep a step ahead

David Tiller, Head of UK Propositions at Standard Life discusses the current market conditions for platforms and gives an insight into some exciting changes coming for the Wrap platform.

We're still early in 2019 and this is already shaping up to be an interesting year.

The Brexit shadow looms large and there's lots of uncertainty. As a UK platform, the direct impact for us is relatively modest, but we're preparing for market volatility and its knock on effects.

We know how important it is that adviser platforms provide stability during periods like this. On this front, we are delighted that our Wrap and Elevate platforms have both recently achieved an AKG 'A' rating for financial strength, the only two platforms in the UK market to achieve this.

We recently reduced the pricing of our Elevate platform, reflecting efficiencies from integration. Naturally, I am being asked whether we have similar plans for Wrap. Our aim with both platforms is to price at a commercially sustainable level.

It is only through sustainable pricing that we can ensure the reliability of the service we offer, while continuing to invest in the future capabilities that advisers and their clients need.

Health warnings aside, however, the answer is yes, we are reviewing Wrap pricing. I can't yet confirm what the outcome will be – but I can commit to keeping you informed with our progress.

Meeting the advice challenge

Today's market is very different from the past. The transfer of risk to individuals (through pension freedoms and the shift from DB to DC pensions) has led to an exponential increase in the need for consumer support and advice. Technology is key here as it has a democratising effect, taking services and options that were once the preserve of the privileged few and making them accessible to many more.

In the past scalability was linked to commoditisation and inflexibility but this doesn't hold true anymore. The unchallengeable advantage that advisers have over robo or D2C solutions is their knowledge and understanding of their clients.

But today's advice market has to deal with capacity challenges, while delivering sophisticated financial planning outcomes, running disciplined and dynamic central investment propositions, all while supporting a rich client experience. Not to mention carrying out reporting while maintaining a disciplined control environment, full auditability, appropriate disclosures, data security etc.

Wrap is very different proposition to Elevate. Wrap is a specialist technology platform for progressive adviser businesses looking to deliver sophisticated investment and financial planning solutions tailored for their clients in a scalable, controlled manner.

2019 will be a pivotal year for Wrap with some really exciting enhancements delivered onto the Wrap platform. If you use Wrap, then:

  • You'll have more control over your Centralised Investment Proposition (CIP). Even while using an external manager you will be able to ensure they tailor their approach to reflect your business' unique philosophy and policies.
  • You will be able to bring more customers into your CIP, greatly reducing the need for manual intervention, even where a client's unique circumstances require an individual solution.
  • You'll be able to automate tax strategy execution, delivering a highly tax efficient outcome without generating additional work.
  • It will be easy to demonstrate that you are satisfying PROD and delivering the correct disclosures with fully up-to-date compliance coded in.

Underpinning this, segregation and control of financial planning and investment activities will be easier than ever before, as will the execution of activities between the two.

We've been working towards this for several years, starting with a strategic architectural decision in 2014 to build separate specialist investment functionality. Without this first step, none of this would be possible.

I am often asked why competitors don't just copy our functionality. I believe for the big transformational developments they simply can't, as their architecture is fundamentally different. It's like building a tower block. The ground work is the most important thing and takes time - without it, however, the building will simply topple.

We've spent a lot of time talking to advisory and investment management businesses to really understand the processes and how interactions should work within a more integrated approach.

Our platform functionality is powered by some complex algorithms, so ensuring accuracy has been an important focus and it's vital to us that advisers and their clients can depend on the reliability of our service.

We know that it's not just the transformational developments that matter. Improving the day to day experience of the platform for you and your clients is also important. So we will have other enhancements, including:

  • Enhanced client reporting.
  • Improved and extended online functionality for clients, should you choose to offer it.
  • A new General Investment Account for third parties, that will allow you to place assets contained in third party tax wrappers into your CIP on the platform.
  • An increased range of investment solutions to provide you and your clients with more options, keeping up to date with new investment developments and potentially lowering the cost of investing. Please remember that the value of your investment can go down as well as up and may be worth less than you paid in.

I hope you share my enthusiasm for these plans, which I believe will really make a difference. It is great to take a small breather from regulatory change. It gives us the opportunity to focus on the things which will really help the advisers who partner with us be the most successful in the market, while delivering excellent client outcomes.

David Tiller
Head of UK Propositions, Standard Life

The views expressed in this article are those of the author and not Standard Life. Standard Life accepts no responsibility for advice that may be formulated on the basis of this information.

David Tiller

David Tiller, Head of UK Propositions at Standard Life

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