29th August 2013

Aegon: Platforms - the new Spinning Jenny

The mid-1700’s saw the start of the Industrial Revolution in Britain, which transformed people’s lives. We were a significant exporter of woollen cloth, and by 1700, woollen manufacture accounted for two-thirds of the value of our exports. When John Kay invented the flying shuttle in 1733, he sparked a number of other improvements, which allowed us to produce better-quality cloth much more cheaply. As a result, demand went through the roof, but our cloth spinners couldn’t keep up. So in 1764, John Hargreaves invented the spinning jenny – enabling mass production.

This called an end to the humble weaver and their cottage industry. The Industrial Revolution marks a major turning point in history – people’s lives changed forever as centuries old trades died out overnight and new communities and occupations were created. The financial services profession is now going through its own Industrial Revolution with the rise of platforms. As we see their use increase in both the individual and corporate markets, things will never be the same again.

Major change driving platform growth

We’re in a period of change as dramatic and fast-paced as the Industrial Revolution. RDR, adviser charging, auto enrolment, social media and the increasing demands of clients is changing the advisory profession forever. 
More and more advisers are seeking their own ‘spinning jenny’ in the shape of a platform, to make sure technology can help them adapt profitably to this evolving landscape. Deloitte estimates that the platform market will grow to £600 billion by 2018.

The benefits of platform technology are clear for you and your clients. They:

• offer a wide range of product wrappers and types of investment
• offer comprehensive tools, such as portfolio planning, tax planning and reporting
• allow a full view of the client's portfolio (including investments not directly held on the platform)
• are accessible to you and, if you choose, your clients to fit with your client proposition
• can integrate with your back-office systems
• use up-to-date, user-friendly technology
• offer flexible remuneration options that can cater for different clients and the different needs of your business

It’s not just you facing change as our profession goes through the platform revolution.Just as the spinning jenny ended the role of weavers, we’ll see consolidation in the platform provider sector. 
Deloitte’s recent research highlights that the current 30 or more platform providers could consolidate down to as little as 10 by 2018. This is down to increased competition and falling margins, meaning revenues will fall from the current level of 30bps to 20bps.

Every firm now needs to consider how they’ll adapt to the new world we face, and choose a platform provider, or providers, if they feel this technology is essential for their individual and corporate proposition. 
Aegon Retirement Choices (ARC) is our award-winning platform combining workplace savings and retirement income. It lets investors manage their savings and retirement income together in one place, which can move with them as they progress through their working life and into retirement. So they’ll have a seamless transition from saving to retirement income. What’s more, our dedicated team of platform development managers and implementation managers can help you embed ARC into your business.

Visit our ARC adviser website to find out what ARC can do for you and your business.

The watch word for our profession must be to consider technology and remember the weavers.

John Joe McGinley
Head of Business Brain, Aegon
July 2013

Back Office, Wraps & Platforms