I’m pretty sure Chuck D and Flavor Flav had other things on their mind beyond platform due diligence when they penned their 1988 classic, but hey, it’s a great record, and its central hook is certainly worth remembering at the moment.

The platform world is changing. The Axa Elevate move broke earlier this week, and it is our understanding another similar move is also about to be announced. We are also aware of at least two other bidders who lost out to Standard Life for the Elevate book, and it seems pretty clear that part of the attraction from SL’s point of view was to buy the assets simply to stop their competitors from doing so.

Standard Life have stated that they see the platform market splitting into buyers and sellers and whilst we don’t necessarily think the market will be that polarised (at least in the short term) there is no doubt that a large amount of platform assets are going to shift around over the coming months. Some of this is happening naturally, and the gap between net & gross flows for some platforms and the fund industry generally is pretty wide. However, the hype is still focussed on what happens if/when your platform changes ownership and the supposed need to take an almost obsessive view of a provider’s financial strength.

Every platform, irrespective of their financial strength is required to have a plan demonstrating how, if the need arose, they would wind down their business whilst still treating their customers fairly. This extends into capital adequacy provision, and the larger providers will have their plan regularly reviewed by the FCA as part of the normal close and continuous relationship. The upshot of all of this is that, if a provider decides to exit the market, one of two things will happen. They will either be acquired or they will exit. If they exit, these plans require them to treat customers fairly and ensure customers are not in any way disadvantaged by the change. The regulatory protection in this scenario is pretty strong, and especially so for larger providers.

Returning to the Axa/SL announcement, 160,000 customers have invested their hard earned via Elevate. SL quote an average case size of £80 to 90k, so for these customers it’s a not insignificant event. However, for these customers, what exactly has changed? Their money is still invested, the charges are the same (for now at least; we’ll be watching to see what happens there), and they will still have the support of their adviser. If they pick up the phone to speak to Axa staff they will find the same people are still there, and whilst they might be nervous about their own futures, they will be delivering the same level of service as they always have done. Even if/when the merger is approved and completed, is it really anything for customers to worry about? Standard Life PLC is one of the largest companies in the UK, and whilst the detail of any migration (if indeed there is one) are still to be confirmed I find it hard to believe Standard Life will be doing anything other than treating these customers fairly.

The merger has been reported in the real world via the Telegraph, FT, City AM and others. It’s noticeable that there are no comments from customers on any of these articles, and the last mention of Axa Elevate on the Money Saving Expert forums was around 3 months ago. Early days yet, but there is no evidence of any customers being worried about the move. Those hyping up the need to move assets and/or change platforms would do well to remember this, and focus on the potential customer outcome.