The evolving platform landscape: Consolidation coming down the track and embracing AI
The platform market is currently evolving under twin pressures. While many advisers are anticipating the coming wave of consolidation, there is a shared concern over the potential loss of competitive variety this will bring. The challenge is a strategic one: finding the right mix of long term partners that will weather the change, provide stability and that all important continuity.
This, coupled with the rapid rise of AI, means that advisers and paraplanners are grappling with a transformative ecosystem that is not yet settled. For firms committed to delivering robust, sustainable client support in this changing landscape, these impending shifts demand both foresight and a strong partnership with financially robust providers.
Platform consolidation among advisers
The prospect of platform consolidation is very real for advisers, with over three in five (61%) expecting to see consolidation in the next three years. And yet, advisers overwhelmingly value variety, with 92% stating that a broad choice of platforms is necessary for them to serve the diverse needs of their clients, and 72% see an important role for niche or specialist platforms.
Most advisers are not wedded to a single provider – the majority are using between two and four platforms. And when it comes to their platform functional needs, the message is clear:
Platform services demand: Advisers are keen to see more availability of the following services on platforms in future
Paraplanner view: Paraplanners prioritise efficiency
For paraplanners, who typically manage due diligence and paperwork, platform choice is less about strategic positioning and more about efficiency. The main blocker to switching for Paraplanners is the time and admin required. Paraplanners stress that factors like service standards, reliable reporting, and ease of data extraction are key to materially reducing their workload. It’s the practical difficulties of learning new platforms and transferring clients that weigh heavily when thinking about future market consolidation.
The platform market is undergoing consolidation due to Private Equity influx and high investment pressure, challenging the viability of smaller platforms. In this environment, advisers require financially strong providers to protect client assets while ensuring compliance with Consumer Duty. Scottish Widows, supported by Lloyds Banking Group, offers the financial strength and innovation necessary for advisers to thrive and sustain client support in this changing ecosystem.
Responsible adoption of AI
The other major structural change is the adoption of AI. The FCA’s decision to rely on existing frameworks, rather than introduce new AI-specific regulation, means firms without formal AI policies face ongoing uncertainty over how to adopt and govern the technology responsibly.
Three-quarters (75%) of advisers who don’t have an AI policy or governance framework currently in place are planning to implement it in the next 12 months, yet adoption is proceeding slowly. Only 10% have a formal AI policy, with even fewer (7%) using it in core processes, and a third (30%) only partially adopting it for some tasks to augment specific capabilities.
Current use cases are mainly focused on:
The main barriers are significant. Inaccurate or misleading outputs (58%), data privacy (50%), and over-reliance on AI at the expense of human judgement (46%) rank highest among advisers as concerns when utilising AI in financial advice. Critically, three in five (60%) don’t feel there is enough support or guidance on how to use AI in their advice business.
Paraplanner view: Paraplanners are earlier adopters
In contrast, paraplanners are further ahead, particularly in automating routine documentation. They are already using AI heavily for meeting notes (85%), suitability (35%), and fact-find automation (26%). Their most wanted tools are practical and efficiency-driven – tax calculators (57%) and suitability software (51%).
Paraplanners are open to AI that reduces repetitive admin but remain concerned about accuracy and compliance sign-off. They need practical, compliance-ready applications that integrate directly into their suitability and reporting systems.
As interest in AI grows, platforms will play an increasing role in offering guidance and support. Many advisers still face significant barriers to adoption, and they will look to providers for support such as:
- Information on what constitutes a good AI policy.
- Guidance on implementation and governance.
- Identification of tasks most opportune for automation.
This also presents a clear opportunity for platforms to share their own emerging expertise – as they explore AI within their own businesses, they can pass on what they are learning, build these insights into future platform enhancements, and design with advisers’ AI-enabled workflows firmly in mind.
