Advisers using single platform can still sometimes call themselves 'independent', says Skandia

Of the advisers surveyed, 40% said that using one main platform meant that advisers could not refer to themselves as offering 'independent' advice, whilst a further 12% of advisers said they were not sure whether using just one main platform "jeopardises" their "independent status".

Skandia, the UK's biggest retail investment platform operator, received 627 responses to its 'adviser confidence barometer survey' which it conducted in August. It said that the figures show that there is a "level of uncertainty regarding platform use and its impact on independence."

Platforms are online services that allow financial advisers to manage their clients' investment portfolios. Some platforms can be used by customers directly.

Under new rules set to come into effect from the end of this year an adviser using a platform service to arrange or advise on investments "must ensure that it uses a platform which presents its retail investment products in an unbiased manner". When selecting and using a platform service, the adviser must pay due regard to its client's best interests. Firms advising on retail investment products must clearly describe their services as either "independent" or "restricted". This declaration must be provided to client investors in writing in good time before providing the service.  

Although the Financial Services Authority (FSA) has said it expects it to be "very rare" for advisers that use just one platform "for all of the investment business of its clients" to "meet the standard for independence advice", Skandia said there are circumstances in which use of a single platform can be permissible for independent advisers.

"An independent adviser can use one ‘main platform’ as long as they consider its suitability for each client and offer access to other platforms or off platform assets where appropriate," Skandia said. "Therefore, the 48% of advisers who believe you can use one ‘main platform’ and remain independent are technically correct."

"It is actually extremely common for advisers to use just one main platform. Data from Skandia shows that 40% of advisers use just one main platform with a few clients on other platforms, and 35% of advisers use two main platforms with a few clients on other platforms. This means 75% of advisers use no more than two main platforms. Only 1% of advisers use a large number of platforms and the trend is for advisers to focus on a few key partnerships," it added.

Skandia said that its survey had found that only 20% of advisers surveyed said they would start using more platforms after the rule changes, stemming from the FSA's Retail Distribution Review (RDR), come into effect. However, 72% of advisers said they would use the same number of platforms post-RDR as they do now, the platform provider said. "8% claim they will use fewer platforms, perhaps indicating that these advisers are looking to offer a restricted advice model," it added.

"Hopefully advisers will be reassured that they can use just one main platform without jeopardising their independence status provided they can justify individual suitability for their clients each and every time," Nick Dixon, Skandia’s marketing director, said. "Using one main platform is already common, and over three quarters of advisers are believed to be using one primary platform. For all platforms, winning primary relationships with advisers will be crucial."