A third of large financial advice firms to become platform operators in the next three years, according to NextWealth report

by | Jan 22, 2023

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Large, vertically-integrated investment advisers and PE backed acquirers are the most likely to build and run their own platform within three years. 

Meanwhile, existingthird-party platform providers are responding by developing modern digital propositions to support what NextWealth calls Whitelabel+ and additional bolt-on services, dubbed Platform+. These are two of the main findings of NextWealth’slatest platform report, The Great Platform Shake-Out.

Heather Hopkins, Managing Director of NextWealth comments: “Competition is fierce among platforms at the moment. Incumbent players are being pressured to modernise and evolve their propositions to suit a pressing need for flexibility and digitisation. Particular pressure is being felt from the adviser segment we’ve labelled Investment Outsourcers. These firms represent 20% of the existing adviser market but are growing rapidly through PE-backed acquisition. They are most likely to have plans to build their own platform – we predict about a third of them will have achieved this within the next three years.”

Hopkins adds: “While we expect a third of these larger firms to adopt the adviser-as-platform model, we think they will maintain a multi-platform strategy to support a wide range of customer needs.” 


The report finds advisers, particularly larger firms, are revisiting their ambitions to launch in-house platforms following a dip in intent identified in the second half of 2021.

“In our first report in 2021 we found that half of advisers with assets of £250 million or more said they would build their own platform within three years. This dropped to just 18% later that year. We think this is because many advisers realised that they could be biting off more than they originally thought. Just because tech exists to make something possible doesn’t always equate to it being the best idea for the business. Another factor was resource. At the time many adviser firms were just too busy.

“In our latest report we’ve found that there has been a bounce-back in ambition, with a quarter of advisers saying they intend to build a platform. There are two key reasons for this:


1. The number of new clients has slowed, freeing up resource to focus on tech and operations.

2. The Consumer Duty regulation means senior managers want better control and oversight of client outcomes.”

‘Old model’ evolving into ‘new model’


When projecting growth of the adviser-as-platform model, some wrongly assume that existing third-party platforms will stand still. 

NextWealth reports that existing platforms are evolving to offer far more services to financial advisers including supporting regulatory compliance and operational efficiency. NextWealth describes this as the emergence of ‘Platform+.

Examples include: 

• Fidelity Adviser Solutions entered a partnership with Conquest to offer planning tools and digital onboarding alongside the platform. The two together can support a hybrid advice journey. 

• AJ Bell launched discretionary MPS three years ago and is among the fastest growing providers of discretionary MPS (both by percentage and net asset growth) according to NextWealth’s latest Discretionary MPS Proposition Comparison report.

• Intergrafin (owner of Transact) bought back-office system Time4Advice and has also launched a range of model portfolios with BlackRock.

• Novia and 7IM are offering access to unitised annuities.

Heather Hopkins comments: “Advisers who are motivated to build their own platform because of frustrations with limitations offered by existing platforms may want to take a closer look at what is happening within some of these firms. There is so much investment and innovation going on and we expect many to leave the ‘old model’ label behind.”

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