Over 4 in 10 (44%) of Financial Planning firms are considering operating a platform of their own instead of using or white-labelling a third-part platform, according to a new report.

Only 2% of the firms surveyed on behalf of Octopus-owned custodian and platform technology provider Seccl said they feel fully in control of their clients’ platform experience.

A large majority (89%) of firms said their clients hold them at least partially responsible for the service they receive from a platform, but 62% said they have little to no control over the direction of their platform’s development.

Over 40% of the firms surveyed said they often have to change the way they do business to fit around the processes of their platform partner.

Sam Handfield-Jones, Co-CEO of Seccl, said: “This research shows that nearly all firms in our industry feel that their clients hold them responsible for a platform service that they don’t feel in control of. This is a big deal and, in our view, underlines exactly why we’re seeing more advisers and investment managers looking to take control of their destiny by operating a platform of their own.

“Historically, the decision to launch a platform has only really been open to the very largest firms or national networks – those with many billions of assets and large in-house platform admin teams. But technology means that smaller firms can now look to get a piece of the platform action. And, as this research shows, a growing number now are.”

The research, conducted by the lang cat, said that 33% of advice firms have given the idea of platform ownership some consideration and a further 11% have given it a lot of thought.

Chief among the reasons why firms would consider this route are operational efficiency (35%) and owning customer relationships more fully (34%).

Mark Polson, principal at the lang cat, said: “Clearly operating a platform won’t be right for many firms, but 40% is a chunky minority of the market that’s looking into it. Big shifts in our sector don’t come all at once, and I suspect twenty odd years ago we’d have seen a similar proportion of firms beginning to consider using a platform for the first time. It certainly feels like we’re seeing a new category forming, which allows firms to take greater control of the platform experience.”

Research was conducted by the lang cat on behalf of Seccl among 181 advisers between 19 May and 14 June 2021.