A few quick thoughts on the announcement from Octopus today that it will acquire Seccl for £10m subject to regulatory approval. Normally I’d do these in the Wednesday Update, but it’s Thursday today and it’s only just been announced. Why are people so inconsiderate?

Anyway, Seccl is a really interesting business, run by Hugo Thorman (who set up Ascentric amongst other things) and Dave Harvey who knows more about building platforms than any 22 other people you care to name. We had a demo of it a wee while ago and we thought it looked great – very modern, not suffering from any kind of bloat, and built to be quick to develop as commercial demands become clear. It has relatively few distribution relationships at the moment, but we know some firms who are close to signing.

It’s one of those platform software providers that allows the adviser firm to be the platform operator (if it has the right permissions and skill-sets, and a discretionary license) – it’s then up to the adviser firm how much it charges its clients and so the potential is there for additional revenue streams. If the firm doesn’t take a clip then Seccl has the potential to be a very low cost option.

For firms who don’t want to or can’t become a platform operator, the vision for Seccl was that they could become effectively sub-tenants of the firms who have.

So it’s still very early days for Seccl – only about £10m AUA and just bought for £10m! That would have made Cofunds worth about £90bn, which it wasn’t. But it’s not about AUA at the moment – it’s about Octopus getting something pretty much ready to rock and roll in the platform space for a reasonable price.

Let’s think about Octopus for a moment – it is also an interesting – and very diverse – business with some big plans. You can read Simon Rogerson’s blog here, which is a useful insight. Advisers know it best for its EIS and VCT products, but it’s got lots more going on than that, with multi-asset funds, cash products, energy products (electricity, not protein bars, but not ruling it out) and more.

Octopus also has its own wealth management arm which uses all sorts of nice tech to do what it does. It’s very modern, discloses its fees in advance (£2k for a financial plan and then a total-cost-of-ownership, all-in figure of 1.8% pa which includes advice, product, investment and a protein bar on your birthday) and it doesn’t take a seer of seers or prognosticator of prognosticators to work out that it might well be a Seccl user before long.

This could be bad news for Hubwise, which is OWM’s white label partner at the moment, but life’s tough in the aluminium siding business.

In the announcement Octopus’s Sam Handfield-Jones, who looks VERY HAPPY in the accompanying press shot, makes it clear that the Seccl strategy I mention above remains the strategy and that Octopus clearly has plans to participate in the wider platform market.

Assuming that this is the case, then I think advisers will shortly have a genuine new alternative to the existing stack of providers. It’s hard for an IFA to select a startup (which is what Seccl really is) – financial strength, ability to access capital and so on are all quite justified worries. That just got put to bed with this deal. I think Octopus is a genuinely forward-looking business and the potential here could be really quite exciting.

However – there’s always a however – the temptation for a diverse shop like Octopus will always be to fire as many of its own products down the pipes as possible. That’s understandable and maybe even desirable depending on who you are – but there will be a balance to strike.

But that’s all to shake out. For now, I think it’s very good news for Hugo, Dave and the team at Seccl, and good news for a happy Sam and Octopus too. The platform market is ripe for some disruption – maybe this alliance might be the thing that delivers a bit of that.