Financial advisers are increasingly dissatisfied with the service they receive from platforms despite placing more business with them.

The annual Defaqto Platform Service Review has found that platforms remain the “dominant solution” within financial advisers' centralised investment propositions (CIPs) but advisers are increasingly unhappy with the service they receive.

The percentage of advisers putting all their business on platforms has continued to increase significantly year on year from 11% in 2016 to 18% in 2018, up by 64%.

However, some 25% of advisers have changed their preferred platform in the last 12 months – a marked increase from 16% in 2017 and 10% in 2016.

Advisers have also reported a decline in service over the past year with falls of between 1 and 4% in levels of satisfaction.

The biggest decline was in adviser charge administration with a fall of 4% in satisfaction levels from 76% to 72%.

There were also significant falls in existing business administration, pension freedom servicing, transition and implementation, online services and ebusiness and a number of other areas (see table below).Only technical assistance showed an improvement.

Defaqto: Platform Satisfaction Levels

Source: Defaqto
 

David Cartwright, head of insight and consulting for wealth and protection at Defaqto, said platforms had to work harder to improve service levels in the face of increased challenges.

He said: “The platform community has faced significant challenges throughout 2018 such as regulatory adherence, the influence of technology and market disruptors challenging cost competitiveness.

“Despite continued mergers and acquisitions, re-platforming exercises and increasing levels of functionality, the survey results indicate that a number of platforms still fall short when it comes to the levels of service advisers expect. With a fall in satisfaction from advisers, it’s important for providers to take note and ensure they are responding accordingly.”

When it came to the services advisers saw as being most important, the ranked order remained largely unchanged; new business administration placed first, existing business administration placed second and online services and e-business third.

However, the average satisfaction score declined to 72% with no individual category achieving an average score of 80% or higher. These results indicate that overall satisfaction with platform service has fallen, said Defaqto.

For platforms, advisers were asked to rate providers in relation to 11 categories. Defaqto asked financial advisers about their views on the service they receive from over 200 providers covering DFMs, protection insurers, platform, pension and bond providers. Product providers were then rated Gold, Silver or Bronze based on their overall satisfaction score.

• The Defaqto’s Platform Service Review is available here: https://defaqto.com/advisers/publications/platform-service-review-2019/