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‘All platforms should do the basics well’: Up close with Mark Polson

20 June 2016

Advisers should know how they are going to use a platform before they select it, argues consultant Mark Polson…

Man with tent

Mark Polson, Principal of the lang cat, the Edinburgh-based financial services consultancy specialising in platforms, pensions and investment marketing, likes to keep a stick on him at all times.

“It’s good to treat new developments in the industry, whether it’s something grungy like client reporting or shiny like robo-advice, with a healthy degree of scepticism and poke them with a stick to see if they work,” he says.

The same scepticism should apply to advisers’ selection of a platform provider: “Advisers are sometimes guilty of not checking under the bonnet enough when they pick platforms, but there’s fault on both sides because platform salespeople have a tendency to over-sell.”

For Mark, the real question for advisers is how are they going to use the platform?

“All platforms should be able to do the basics well now, like executing trades on time, but you can’t possibly make the right platform decision unless you know in detail how you’re going to use it,” he says.

“Do you want investment x-ray tools, cashflow modelling and investment modelling? How do you want the platform to integrate with your back office system or CRM [client relationship management system]? Do you have one? Or will the platform perform that function?

“If a big part of your world is that you don’t want the platform to generate any paper [correspondence] then that limits your universe.

“Similarly, if you want to use ETFs and investment trusts, then that’s going to narrow your choice down, too; most platforms say they offer these, but there’s an extra eight layers of detail behind that – some have genuine real-time intraday trading and a very wide range; others have limited ranges and only trade once a day. Some platforms can’t cope properly with exchange-traded assets in model portfolios; others are fine.”

Income withdrawals are another case in point. “Every provider says they offer flexi-access drawdown, the ability to take natural income from an ISA and 20 other kinds of income flexibility, but underneath there are radically different experiences from platform-to-platform in terms of how income is handled,” says Mark.

“Many advisers are finding that the client experience when taking income across wrappers is not what they’d hoped – the only way to avoid this is to look in detail at ‘money out’ processes before you get involved.

“You have to look at what client experience you want, and then try to measure platforms against that.”

Equally, advisers should beware trying to fit a square peg in a round hole: “Suitability is what matters most. It has to be suitable for the client, it has to be suitable for the adviser firm as well, but there’s no point in trying to make a platform do something it isn’t designed to do. It’ll just lead to frustration and bad business relationships.”

Training ground

Mark joined the industry 20 years ago as a 22-year-old direct salesman for Scottish Widows.

“There’s a lot of stuff nobody is very proud of from back then, but it was an amazing training ground,” he says.

“There are lots of desk jockeys in our industry who have never worked out in the field. Unless you’ve been in a client-facing role it’s very hard to understand what life for an adviser is like.

“Everybody should go and experience sitting with clients – it would help everyone from CEOs and proposition heads to marketing and advertising guys.”

He moved to marketing propositions instead of selling them with Scottish Life, and then to flying the flag for Standard Life’s wrap.

“I joined Standard Life in December 2007. Compared to Transact, which had been in the market since 2000, SL’s wrap was a johnny-come-lately, but it was still relatively early in the adoption of platform technology. It was a real baptism of fire, as anyone who’s launched a platform knows.”

At base, platforms enable advisers to do four things: buy stuff, hold stuff, find out stuff and sell stuff.

However, behind the scenes it is not quite so simple. “There are millions of moving parts,” says Mark. “It’s phenomenally complex and it was very common in the early days for those parts to not move in the way you’d want or expect them to.

“Having people shout at me wasn’t much fun at the time, but was a brilliant experience in retrospect.”

Birth of the lang cat

Being “done with corporate life”, he spotted a gap in the market for a business that understood the intricacies of platforms and the highly regulated industry in which they operate and could bring them to life for the public at large.

“There’s always been frustration among providers that you either understand how stuff works or you can communicate. Not many people can bring the two together. That was the genesis of the idea and it’s never really changed,” he says.

In late 2010, out of a “cupboard in a friend’s office, which we called the gimp cave”, the lang cat was born as a product consultancy and marketing agency. “One bit borrows from the other,” says Mark.

Today, it employs 12 people and works with platform providers, wealth managers and advisers on things like proposition development, due diligence and marketing strategy. It publishes an advised platform guide once a year, which outlines developments in the market, proposition details and pricing.

“Advisers have told us that they like it because they can read it end-to-end without losing the will to live. You can lighten serious material up; you can be informative without being eye-gougingly boring.”

Power shift

Mark cites the biggest change he has witnessed in the industry over the past two decades as a power shift from providers to clients and their advisers that Sir Callum McCarthy sparked in his infamous Gleneagles speech in 2006, when he launched a bitter attack on the distribution model of retail financial products.

“In the mid-90s the provider and adviser were pretty much aligned,” says Mark. “Commission was a big sales incentive and the client was shunted around like a commodity all too often.

“Over the past ten years there’s been an incredible rearrangement of the industry helped by regulation and technology.”

For the Edinburgh born-and-bred father-of-two, the journey for the platform industry is by no means at an end.

“Platforms have come an incredibly long way, but have a lot left to do,” he says. “We’re fond of saying platforms are dead, which gets a lot of platform chiefs wound up. What we mean, though, is that if these amazing technologies are to genuinely fulfil their promise, they’re going to have to reinvent themselves to fit more with how advisers work in a post-RDR and post-FAMR world.

“For example, hardly any platforms let advisers record a client goal and track progress against it. If they’re serious about supporting financial planning, that’s an obvious gap.”

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