From wrap platforms to ecosystems, the iPhone moment has arrived

I listened to two excellent interviews last week: Citywire interviewed Barry O'Dwyer, "Why IFAs don't need platforms anymore." The second was an NMA roundtable, "Platforms, you all need to up your game." Both are worth a watch and have interesting perspectives beyond platform bashing. The essence of O'Dwyer's argument is that platforms are expensive and are, at best, legacy technology beset with integration deficiencies. Having joined Royal London in 2019, he flogged Ascentric to M&G, so he is a man who walks the talk.

The NMA Roundtable focused on two key themes: platform service (or lack thereof) and integration limitations that add to the workload.

So I spoke to my mate and exec director colleague at Novia, Nick Raine. Nick is now the CEO at Soderberg UK and is my go-to guy when I want a practitioner's perspective on all things platforms. Soderberg has partnered with SECCL, Plannr, and Morpheus Wealth and are poised to launch their "connected platform" later this year. When I asked Nick about his views on the points made in the two interviews, his goals at Soderberg were more radical and straightforward:

• To make its platform invisible and allow advisers to access core functionality (custody, trading, wrapper management, etc.) via Plannr. In his view, it's all about a single point of access and tight two-way integration.
• To completely automate the high-volume journeys (client onboarding, reviews, top-ups, etc.) and eliminate the need for manual interactions.

To achieve these goals, Nick was clear about focusing the development on automating high-volume journeys, avoiding seldom-used complex functionality. Nick sees this as a virtue and a differentiator. His message to potential partner firms is "Automating core functionality is king," this will be designed from the ground up to be efficient, provide a great customer experience, and be resilient. Partners can continue to use their existing tech for cases that don’t fall within these high-volume, non-complex journeys or is better aligned for specific client needs. Ongoing automation and functionality will be reviewed as the platform develops.

When looking at technologies to adopt within their framework, Nick asks the following questions:

1. Can it save time and effort and reduce cost?
2. Can it increase automation, improve data integrity, and eliminate manual service points?
3. Can it improve the customer experience?

So, coming back to the two interviews:

• Platforms can't be eliminated, but they can and should be hidden behind a CRM, incorporate a data management layer, and be cheap to run.
• Having service as a differentiator makes sense, but designing out the need for manual interactions will be the winning proposition—provided it is bulletproof.

Both the above will be a challenge for legacy platform providers and an opportunity for the new (white label) entrants who are not anchored to legacy technology and see the platform as a critical element of an ecosystem where the CRM system is the first amongst equals and tight intention and interoperability are givens. I am a big fan of this approach, and it will win, but the new entrants are currently challengers with some propositional and functionality gaps to bridge. Early adopters will

need a pioneering mindset and have to accept some bumps in the road as the technology matures and delivery roadmaps are built out.

We are at the equivalent of Steve Jobs moment, when the iPhone was announced on June 29th, 2007. Nokia was the market leader, and it took only five years for the brand to fall miserably. By the end of 2013, it was finished. The iPhone was far from perfect, but its potential guillotined the established competition because of:

1. The App ecosystem.
2. Innovative design enabling a superior user experience.
3. Adoption of evolving technology.
4. Finally, marketing and branding.

Nokia failed because of corporate complacency, misjudgement of market uptake, a lack of an innovation culture, and an inability to react. Is this a valid comparison? A lack of integration, automation, and poor customer service is driving a rising tide of IFA dissatisfaction. Most legacy platforms (FNZ apart) are set for extinction when you heap on margin pressure. The Soderberg alternative, where the platform is part of a high-performance, modern tech ecosystem with foundations of automation, integration, data integrity, and customer experience, is the next evolutionary step.