David Howard examines whether we’ll see the death of platforms over the next five years – and the kind of changes we can expect.
The “Death of platforms article" featured in Money Marketing had a catchy headline, even if the article went on to refine the argument to one of evolution which is much more sensible. However, David Ferguson’s response was better as he argues the case for a bright future for those Platforms that embrace technology to improve service efficiency. While some Platforms will disappear, there is no extinction event on the horizon that should cause Platform Providers to reach for their bucket lists and seek redemption. The truth is that, in the next five years, we won’t be talking about Platforms anymore because they will undergo a profound change. The core technology will become super-efficient, self-serve engines that will migrate to the plumbing layer of technology that we all take for granted. The other ‘P’ that will replace Platforms is the Portals and this will be dominated by FinTech firms that don’t have the legacy drag of existing providers. One thing is certain is that the services provided by Advisers is set to grow because:
- Pension freedoms have increased choice and that comes with complexity
- Income available in retirement won’t support the lifestyle that most of us desire so getting expert advice on how matching risk to outcomes and selecting the underlying investment and insurance products will be essential
- Robo-advice will develop but won’t replace the fundamental need for reassurance when making big decisions
The following diagram is my take on how Platforms will evolve and the twin focus of automation and service excellence and the more exciting development of a portal’s capabilities that are centred on customers’ needs and outcomes they expect during retirement. So my prediction for the Platform industry is positive. There will be different players and some Platforms will inevitably fall away, but those that adapt to the changing market needs will be well-placed.