It revealed that while 24% of firms with £250m in AUA have a platform, mainly from a white label supplier, the projected market size has not grown in the past two years. 

The report found that overall adoption is slowing but still growing.

The share of firms planning to launch a platform may have slowed down but the trend continues as firms strive to take more control in-house, the report found.

Adviser firms says they need and want control of client data and one of the ways firms are trying to achieve that is by becoming a platform operator.

Customer experience, investment functionality and reducing operational risk are the main drivers of the trend. Cost and the ability to earn revenue are secondary, the report says.

Meanwhile third-party platforms are adapting to close the gap and to retain assets.

Heather Hopkins, managing director of NextWealth said: “The rise of large financial advice firms and the woeful state of integrations has put pressure on the third-party platforms. New, tech-first entrants have increased competitive pressure on platforms, increasing choice and squeezing on price.”

Interviews with executives in incumbent, third-party platform providers found a clear distinction emerging among those that are fighting the trend and those that recognise it as a fact and are responding.

Heather Hopkins said that last year third-party platforms were more complacent, with interviewees feeling that the trend would fizzle out as firms came to recognise the volume of work that platforms do for very low margin.

She said: “Since then, some have recognised that large firms that control significant asset pools will look to take on some of the role the platform currently performs and in return, they expect to retain a portion of the platform fee.”

So what does the future look like for adviser platforms? Heather Hopkins said: “Our conclusion about white-label platforms is that in most cases they don’t solve the problems caused by a multi-platform strategy. Several advice firms have managed to launch and embed a platform but many have struggled.

“The test will be to see how more nimble, tech-first propositions grow and scale. One thing is certain though, they are challenging the entire industry.”

• The report, The Next Platform Shakeout: A spectrum of choice and complexity in the platform market, drew on a survey of 244 financial advice professionals, data requests from eight white label platforms and 33 in-depth interviews.