According to independent financial research company Defaqto, changing platform provider can be a costly exercise for planners if the wrong platform is chosen in the first place.

Defaqto says this underlines the importance of robust due diligence to ensure advisers partner with suitable platforms from the outset.

Defaqto’s recent survey of advisers using platforms found that they are placing an increasing amount of investment through platforms.

In 2009, 62% of advisers surveyed were putting more than 50% of their investment business with a platform, which increased to 69% in 2010. At the same time, however, the survey found that 25% of advisers have changed platform provider in the last year – a figure which has increased from 21% in 2010.

Defaqto’s white paper – Adoption of Platforms – published today, highlights three key areas where advisers can be adversely impacted if they need to switch platform:

The administration involved in moving large amounts of assets to another platform

The perception clients will have of the adviser’s decision-making ability

New processes and relationships will need to be developed as part of moving to a new platform

As a result, the paper concludes that robust due diligence on the part of advisers is key to ensuring appropriate platform selection.

The paper, and Fraser Donaldson’s – Defaqto’s Insight Analyst for Funds – full commentary on this issue can be downloaded, free of charge, at www.defaqto.com/adviser/ifa/guides.

Defaqto is an independent financial research and software company, specialising in collecting, researching and analysing financial products and funds.