Advisers scale back platform usage amid cost of living crisis

by | Oct 11, 2022

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Financial advisers are set to place less business on platforms as UK investors grapple with the cost of living crisis, new research shows.

This year’s CoreData Research platform study shows only a third (33%) of advisers plan to increase business on their main platform over the next 12 months – down from nearly half (44%) in 2021.

The slowdown in expected platform flows is translating into less frequent usage. The proportion of advisers using platforms on a daily basis has plunged from 71% in 2021 to 55%. Daily platform usage among advisers focused on mass market clients has fallen particularly sharply (48% vs. 73% in 2021).

The CoreData study, which surveyed 420 financial advisers in June, shows Transact is the most used platform, followed by Quilter, Aviva and abrdn.


The report also shows the certainty of annuities is proving a strong pull amid ongoing market volatility. Annuities and income drawdown remain the most in-demand products on adviser platforms and have grown in popularity (31% vs. 25% in 2021). This reflects better annuity rates in 2022 which are linked to rising gilt yields and interest rates.

The second most popular products on platforms are full SIPPs (24% vs. 22% in 2021), followed by discretionary investment management services (18% vs. 19% in 2021). Adviser demand for investment trusts (10% vs. 15% in 2021) and ETFs (6% vs. 8% in 2021) has dropped amid falling equity markets.

Meanwhile, service, functionality and retirement advice services remain the top three satisfaction drivers, showing the ongoing importance of platforms performing well in these core areas.


“Platforms may be in for a bumpy ride over the next few months as the cost of living crisis and volatile markets dent investor sentiment and fund flows,” said Andrew Inwood, founder and principal of CoreData. “Those platforms able to support advisers best through a sublime service offering, flawless functionality and wide product range will emerge as winners.”

Elsewhere, the top allocation driver prompting advisers to use one platform over another is better value for the client, highlighting a client-first mentality ahead of the incoming Consumer Duty rules. This is followed by simpler to use, better reporting and low error rate.

The client-centric approach is further evident in attitudes towards vulnerable clients. More advisers this year say they consider tools and support services to help manage vulnerable clients when choosing a platform (53% vs. 45% in 2021). These findings indicate a rise in the number of vulnerable clients on the back of the cost of living crisis.


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