Platform providers must not become insular when it comes to distribution or they'll get left behind, according to Praxis Partners Kieren Dell.
"My suggestion to anybody coming into this market would be to deal with external distribution and not just internal distribution to keep you on your toes," Dell told an audience at the seventh annual InvestorInfo Wraps, Platforms and Masterfunds conference in the Hunter Valley yesterday.
"What they'll [platforms] find a couple of years down the track is that everyone else has moved on and their advisers are saying they're not competitive and losing clients," he said.
"The fact is that many advisers are not completely tied . . . and that can lead to high turnover in advisers as they go to groups where they can get more choice of platform.
Distribution always seems the key, but it's amazing the number of institutions that assume because they have internal distribution they are going to get flows . . . many don't get the flows they expect."
According to Dell, small platforms must build funds under management through their distribution if they are to survive in the current market environment.
"My fear is that if you don't have $8 billion to $10 billion as a minimum, then it is going to be very, very hard to compete," he said.
