Speaking to InvestorDaily ahead of the 14th annual Wraps, Platforms & Masterfunds Conference in September, Mr Burns said there have been many theories circulated over the past five years about the death of the platform.
The typical argument is that the next generation of the technology that has allowed platforms to dominate for so long will be their eventual demise, he said.
“Platforms became a dominant player because they took a number of managed funds and gave advisers an accounting system and a reporting mechanism which made life very simple for them,” said Mr Burns.
“You can see that’s where all the flows are going now. And that made a lot of sense.”
The popular theory now is that there could be a convergence of technology in the future that renders them irrelevant, said Mr Burns.
“But I don’t really believe the death of platforms is imminent. I see them having quite a long shelf-life. There’s a lot of built-up faith in these vehicles, and the value proposition that they offer remains compelling,” he said.
“That doesn’t say though there won’t be crossovers in what the platforms generate versus what Midwinter, COIN and Xplan are doing on the pure CRM/advice modelling side of things.”
Software companies like Midwinter will end up “crossing over” and competing with platforms on online calculators and advice portals, he said.
“Particularly in those portal areas, I think it might end up being complementary as much as it will be competitive. I don’t see it being destructive,” said Mr Burns.
The real threat to platforms will likely come from the mFunds … of the world, he said.
“You’re enabling access into the same investment options, transaction functionality and reporting. The only thing missing is the accounting side. If you put some convergence around that, then it might be a genuine threat,” said Mr Burns.
The absence of the big platform providers amongst the foundation members of the new mFund settlement service is particularly glaring, he added.
To hear more from Peter Burns on the ‘The Software Threat’ facing the platform industry, book your ticket now for the 14th annual Wraps, Platforms & Masterfunds Conference.
