Nearly all advisers have had to apologise to clients for poor platform service, with asset transfers a particular problem, new research has found.
Parmenion’s 2024 report ‘The Impact of Poor Platform Service’, produced in conjunction with the lang cat, reveals worsening service from investment platforms this year. It found that 95% of financial advisers have had to apologise to their clients on behalf of providers over the last year, an increase from 2023’s report.
‘The Impact of Poor Platform Service’ is based on qualitative and quantitative research conducted in Autumn 2024 with 172 members of the Lang Cat’s adviser panel.
The research found that almost 30% of respondents reported a ‘significant impact’ on their day-to-day work from poor service given by platforms. One respondent said: “The service was unbearable – long delays, lost records caused by multiple mergers, lack of knowledge at the company.” Because of this, the vast majority of advisers had apologised to clients on behalf of platforms for poor service, an “astonishing proportion”, the lang cat said.
More advice firms are willing to switch platforms in reaction to poor service, the report shows, which should worry providers. Some 45% of advisers said they have changed platforms in 2024 for this reason.
Platform transfers are especially difficult, with 90% of respondents thinking of a negative word or phrase when asked to sum up their experience of the asset transfer process. Advisers described the process as “time consuming”, “painful” and “onerous”. One in five advisers said they had waited more than six months for a transfer to complete, while nearly 10% had waited more than a year.
Other key findings from the report are:
- 82% of individuals state that poor service is having a significant impact on their day-to-day working lives;
- 89% of the profession agree that providers should agree a consensus and publish like-for-like transfer data;
- Three quarters of firms prefer cash transfers for clients as they are more predictable and often faster;
- One in three instances (34%) of contacting a platform is to chase up existing work in a queue.
Parmenion’s CEO Martin Jennings said:
“In the new era of Consumer Duty, this year’s report is a disappointing read. The advisers surveyed have even less confidence in platforms in 2024 than they did last year, which should be concerning to providers. Poor platform service is linked to a double digit loss of productivity in advice firms, and we would appeal to the whole industry to ‘lean in‘ and take accountability to improve the platform experience for everyone, especially when it comes to pain points such as transfers. None of us want or need more regulation, but unless we see meaningful improvements, I fear this is what we will get.”
Parmenion Chief Marketing Officer Sarah Lyons commented:
“We hope our new report will galvanise everyone with a stake in platform performance to take action to improve overall service. The client pays for the platform, but it’s the adviser who bears the cost of poor service. This unseen cost continues to blight the profession, and ultimately undermines consumer trust in all of us. .”
The Lang Cat’s Insight Director, Steve Nelson said:
“One year on from the inaugural ‘Impact of Poor Service’ report, we have seen things get worse for adviser firms and their clients. Platforms must embrace technology and improve their processes to better serve advisers and their clients, or as we’ve seen in 2024, advisers will punish them by selecting a better alternative.”
