Before we begin, might I please beg of you to spend just a few minutes rating how your platforms have done in Q2 2021? It’s been a big quarter for a lot of them, and this forms at least part of the report card for many. Free summary playback for all respondents. You can find the survey here.

Hot, innit? Those of you in the sweltering South may be suffering, but spare a thought for us up here, where the mercury has relentlessly climbed to, ooh, about 23 degrees, before settling back to about 14 at night. It’s almost unbearable.

With such a hot week, you can’t be expected to do any proper work, so instead you should just have something good to read, and that’s what I’ve got for you – or will do tomorrow, any road.

That’s right, we’ve got a new paper to shill. This one isn’t really ours; it’s Seccl’s and we’ve just supplied some research, a bit of thinking, some jokes and a chapter on fudge. You’ll have to read it to find out.

For those not sure, Seccl is one of the new breed of ‘adviser-as-platform’ providers, and it may not come as a shock grenade to learn that the niceties of doing that very thing is what the paper is about.

The truth is that becoming a platform operator isn’t for everyone, and in an admirable bout of honesty Seccl acknowledges that and gives a really decent breakdown of what the practical implications are. You will need new permissions, you’ll be contracting directly with the client so will need to have your own client T&Cs, you’ll be doing more in the way of operations so will have to get used to that, and so on. But, just like pressure washing the drive, the thought of doing it is probably worse than the reality, and if you’re motivated and want it enough, it’s doable for firms with even relatively modest levels of AUA. Seccl says it can work economically for firms from £150m AUA; while I don’t do it all day and they do, I do think that’s probably a bit low and the figure might be closer to £250m. Maybe £150m and still growing would do it.

That economic point is an important one in the paper – one of the big headlines for working this way is that firms can start to earn revenue from platform charges. Note I don’t say profit – that’s a function of a bunch of different things. Whether that revenue is worth the candle is down to efficiency, tight management, good technology, and size.

In the research we carried out, revenue was only the third main reason firms said they’d think about going down this road – the first two were ‘creating operational efficiency’ and ‘owning customer relationships more fully’. The first of those won out by a good margin. That’s encouraging – from where we sit, doing this is much more about control and efficiency than clipping the ticket in one more area. Control is a big theme of the paper: overwhelmingly firms told us that their – your – clients hold you accountable for the service from platforms, but of course you’re only partially responsible for that at most.

Anyway, they’re launching the paper tomorrow, it’s called “Advisers Assemble!: Why more DFMs and advisers are choosing to operate their own platform”, it’s a good read, it’s free, and if you’d like to know more we’re running a launch event tomorrow at 10.30am. Loads already signed up; if you want to come and join you may do so by registering here.

HOT LINKS THIS WEEK

  • More stuff to watch: HomeGames this week is with Rob Reid, all about the CII/PFS debacle, and lots more. Rob isn’t known for holding back, so if you’re interested in the future representation of the profession, this is a must watch. Here at 12.30pm, or on the YouTubes later.
  • We won something! Very chuffed. Our ESG paper from earlier in the year: Crossing The ESG Event Horizon picked up the Thought Leadership (Retail) category in the Investment Marketing & Innovation Awards. Your faithful Top Class Wednesday Update also got a highly commended in the Best Blog category, beaten only by an up-and-coming asset manager called BNP Paribas. Good to see the underdogs getting their moment in the sun.
  • Big numbers for Transact, as ever one of the first to announce in the quarterly cycle. Bit of an uptick in outflows too, but you can’t argue with net flows like that. £50bn is some milestone.
  • And your music choice this week is, of course, Iron Maiden’s new song, The Writing On The Wall. As with most late-period Maiden, it’s too long, too slow, the lyrics aren’t the best and Bruce’s voice, post-cancer, isn’t what it was. Doesn’t matter, though: a meh Maiden song is still better than anything else you were planning to listen to today, and there’s a great Adrian Smith solo in it too. Here it is, and enjoy.

Drink lots of water and see you next week. It’ll be raining.

Mark