Imagine a world in which every investment you bought generated at least three different pieces of paper that arrived separately by post.
Each of those investments also generated a further two or three postal items every year. And the only way you knew the value of what you had was by calculating prices for each item and adding up their values. You will probably think that this would not just be tiresome for you, but it would also be expensive. That is why ‘platforms’ or ‘wraps’ are now increasingly being used to administer clients' investments, with big gains in efficiency and communication.
Platforms are simply administration machines. They are custodians of your money (regulated by the Financial Services Authority) and have no power to do anything with it unless your adviser instructs them, which we can only do with your authorisation. For various reasons, not everyone is suited to the use of a platform. These reasons could include a low risk tolerance or a wish to invest only in the short-term.
Platforms are designed to help people who have a number of assets to manage, and may attract additional costs (for example adviser and fund charges, and the platform itself may have an additional charge linked to the value of the investments held). Some platforms do not permit the registering of assets elsewhere. In short, we will only recommend you use a platform if it meets your circumstances and needs.
Platforms hold investments and provide tools to manage them. That means they supply statements encompassing all the investments held on the platform, categorised by type (such as equities, fixed interest, cash), making it is easy to understand your overall portfolio. Moreover, the platform can incorporate different types of account, for example an ISA and a pension, and can present statements of your investments both within each separate account and as a combined package. Some clients may hold as many as four different accounts on the same platform, in which case being able to get an overview of the whole of your investments can be very helpful.
Most platforms enable clients to access their accounts online via secure login and to see their current valuations at any time. Platforms incorporate a ‘cash account’, to which dividends and interest are paid. It is easy to set up payments from this cash account to your bank account, so that you have just one monthly or quarterly incoming payment from all your investments to keep track of.
Some platforms market direct to the consumer, in which case they provide no advice and you have to make all your own investment decisions. The platforms used by advisers tend to have more sophisticated reporting, analytical and investment planning tools. Please talk to us to see if a platform is right for you.