Investment platform market to consolidate as fees start to fall
Typical platform will need £40bn of assets under management to break even as margins decline
1 July 2013
Increased competition and reduced margins will force investment platforms to consolidate, according to Deloitte.
Andrew Power, lead RDR partner at Deloitte, said:
“The value of assets held on platforms is estimated to grow from about £200bn today to £600bn by 2018. This growth will be driven by continued demand from advisers who see platforms as an essential part of their RDR-compliant, fee-based business models.
“However, one consequence of the RDR is that margins will be squeezed with revenues for platforms likely to fall from about 30bps to 20bps. For a platform provider, this could increase the breakeven point from around £20bn of assets to about £40bn. The result will be that the intermediary platform market will consolidate to fewer than 10 large providers and a few specialists compared to about 30 platforms today.”
Notes to editors:
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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