Financial advisers are placing more focus on financial strength when considering switching platforms, according to a new study.

The report by analysts AKG suggests that financial strength is becoming a more important factor for advisers when selecting a new platform.

Despite this only just over half said it had been an important criteria when choosing their existing platform. The research suggests that financial strength may be the most “under considered” factor when initially selecting a platform.

AKG, which provides financial strength ratings and other financial analysis, said the study suggested the financial strength of a platform was becoming more important to advisers when switching platform.

Overall, advisers were most likely to have chosen their existing platform based on charges, investment options and online functionality.

1. “What were the most important selection criteria when you selected your existing platform partner(s)?” Source: AKG

The study found that charging levels, service delivery and worries over financial strength were the most likely reasons for advisers to consider switching platform providers.

The research is part of a new guide aimed at advisers and Paraplanners titled Financial & Operational Strength – its role as a foundation in platform due diligence.

The guide, sponsored by Aegon, found two-thirds of advisers (66%) would consider switching provider if their charges were uncompetitive or service levels fell (66%). Some 58% would consider moving over financial strength concerns, AKG found.

Platform strength was ranked the fifth most important factor (53%) with charges (74%), investment options (71%) and online functionality and tools (59%) all deemed more important.

The guide looks at the importance of carrying out due diligence when selecting or retaining platform partners.

Practical approaches in the guide for advisers conducting due diligence include financial warning signs.

Matt Ward, communications director at AKG, said: “Financial strength is not a hypothetical risk. Due diligence is an ongoing process and requires regular consideration.”

Research was carried out in April and May with 100 advisers responding.

• The guide is free to download here: https://www.akg.co.uk/downloads