Investment Platform Providers: What should you look out for?

An investment platform (or trading platform) is an online service that enables financial advisors or wealth managers to invest for clients into a range of investments, such as securities, funds, structured notes or cash, all in one central place.

Over the long term, client investment goals and financial aspirations change. It is therefore imperative to choose an investment platform that can cater to their evolving requirements. This can be challenging with more and more platforms jostling to attract business in the international arena. In this article Antony Kelsey, Group Commercial Director at Capital International Group, outlines his tips for finding the best investment platform:

Choose an investment platform provider with a local presence

While some investment platforms offer a local team with in-country customer support, others do not. With local presence comes local support and knowledge. Work with a provider who understands the regional challenges that investors face and who can provide reassurance in a client’s own language and time zone.

Pick the right jurisdiction

Obviously, it's important that you select a platform which is authorised and regulated by a recognised body. It’s also important however to be aware that laws and regulations do vary between countries, so be sure to choose a jurisdiction with a strong regulatory and legislative framework. Pick a jurisdiction which is able to clearly demonstrate how a client’s hard-earned wealth and personal data is kept securely offshore. The Isle of Man and other UK Crown Dependencies are great examples of this and are a common choice for many investors.

Understand the costs

It’s easier than you think to end up in a situation where you lose money because of hidden fees, or costs that weren’t made clear to you from the outset. Make sure you fully understand the associated costs or fee structure of an investment platform before you sign up.

Pick an investment platform with a variety of solutions

Make sure your investment platform has a great variety of solutions. Not all investment platform providers offer the same level of access to the stock market. It’s important that you are able to buy and sell a range of stocks, shares, mutual funds and unit trusts as well as listed passive instruments such as Exchange Traded Funds, which are increasingly popular with investors.

Ensure compatibility with a range of financial products

Make sure you can link to appropriate structures or product wrappers, such as trusts, international pensions and life assurance or endowment products. All of these have different tax, control and legacy benefits which can be very helpful when investing offshore. Again not all investment platforms have connections with these product or structure types.

Make sure you can appoint discretionary fund management

Check that your investment platform allows you to appoint a discretionary fund management company of your choosing, should you want a professional manager to make the investment decisions and look after the investment portfolios.

Check the investment platform’s onboarding time

Efficient onboarding gives advisors the opportunity to focus on their existing clients’ portfolios and the expansion of their client base. You want to be able to send documents electronically without the need to post documents half way around the world.

Think online-first

The investment platform needs to have sound online access so that advisors can easily access and track their client portfolios. It is also enables third party data feeds for independent monitoring and consolidated reporting.

User-friendly for end clients

It must be simple to navigate with responsive customer service and ensure ease of encashment so clients can access the value of their investments whenever they need to.

Choose an investment platform provider with a proven track record

Make sure your investment platform provider has a proven track record. Ideally they should be large enough to give you comfort that they are secure but not too large that you receive poor service. Meet with them or ask if they can provide a reference or client testimonial.

Capital International Group (CIG) is headquartered in the Isle of Man and is regulated by the Financial Services Authority. The Group has sister offices in Cape Town and Johannesburg, South Africa and offers an ‘open architecture investment platform which allows access to a global universe of offshore investment opportunities. Deal in listed securities, funds, collective investments and structured notes, all from one central account. CIG’s investment platform doesn’t just provide access to the company’s own products but more importantly, to competitor’s products, making it truly ‘open’.

‍Disclaimer: The views, thoughts and opinions expressed within this article are those of the author, and not those of any company within the Capital International Group (CIG) and as such are neither given nor endorsed by CIG. Information in this article does not constitute investment advice or an offer or an invitation by or on behalf of any company within the Capital International Group of companies to buy or sell any product or security or to make a bank deposit.