Our client was a large international financial services group providing insurance, investments and pensions. They had invested in a technology platform to facilitate online investment activities for retail investors and their advisors (a wrap platform). Additional funding was required to continue to develop the product and to build a substantial client base. We were engaged to review the wrap platform’s proposition and the market assumptions used to underpin the business case.
Our work was concentrated into three core workstreams: a review of the financial model driving the business case, a desktop research review of the retail financial services distribution landscape and primary research among UK IFAs, competing wrap providers and other retail FS market participants.
CIL’s research advice allowed the client to:
- Anticipate future pricing pressure for wrap platforms
- Recognise the need for wraps to compete for the attention of financial advisors as well as consumers, and how financial advisors evaluate potential wrap solutions
- Understand the proposition, strengths and weaknesses of competing platforms
- Benchmark the performance of their own platform
- Stress-test the business plan and build an alternative forecast scenario to that put forward by the platform management team.
Our recommendations showed a market in which penetration was growing strongly both among clients and advisers, but in which pricing was likely to decline significantly. The return on investment was therefore too distant; our client subsequently disposed of this asset and exited what has become for many an uneconomic marketplace.