abrdn introduced a new charging structure for new clients and AJ Bell amended their tiered charging structure, reducing the overall cost of platform charges. It has been a while since we’ve seen pricing changes, and it will be interesting to see how this is picked up by advice firms; will firms see these platforms in a different light as part of their annual platform review?
There were also several notable product developments that improved product choice:
- AVIVA launched a junior ISA
- Fundment launched a Cash ISA
- Fusion platform expanded their third party onshore and offshore options
Other notable updates came from Fidelity and Wealthtime. Both announced they are continuing with their existing platform technology partners for the next phase of their respective platform developments.
We have also been paying close attention to platform cash. Platforms have been revising interest rates offered following the latest 25 basis point reduction in the Bank of England base rate.
Observations include:
- Frequency of interest payments vary from monthly to six monthly
- Some platforms are revising down the interest rates offered quicker than others
- The method of interest rate calculation is different across the industry - interest rate tiering structures (most common), size of cash holdings, single interest rate on all platform cash, or different rates depending on product wrapper.
With no standard approach it can be quite complicated to compare platform cash interest rates on a like for like basis. We have surveyed the latest rates for all the adviser platforms GIA or ISA cash rates feature on DD|hub. On a simple average, interest rates offered by platforms averaged at approximately 2.8%, compared to the current bank of England base rate of 4.75%.
This is maybe one for advice firms’ Consumer Duty and platform assessments, but cash interest rates could be a factor to consider when discussing how platforms deliver value, particularly as a platform metric for a post-retirement proposition. Some platforms offer other interest rate services, but if an advice firm’s investment proposition places strategic importance on managing sequencing risk and reducing short term capital at risk, treatment of platform cash could be a useful area to consider as part of a firm’s review process.
The next threesixty update will be in March 2025, but firms can get the latest information from DD|hub at anytime and can be updated on changes in real time through the provider follow function within the due diligence section of the software.
If you have any further platform or DD|hub related questions contact our Research team.