Adviser workshop: How to set up an execution-only platform

Barry Mumford (pictured), Peter Hargreaves and Rob Hudson highlight the hard work and difficult decisions that go into building an execution-only platform.

Barry Mumford

Chief executive, Commfreefunds.com

When setting out to build an execution-only platform without previous experience you need time and patience. Unless you have plenty of both, do not bother. From the germ of an idea, it took us nearly two years to create an operational product, with many frustrations and blind alleys on the way.

The second thing is to decide what you are not going to do; in our case offer advice.

Third, decide what you are going to do; in our case, offer a limited range of products with zero initial and fully rebated trail commission on new and transferred-in business. Offer this to a sub-set of the execution-only market that rarely or never uses the support services of online IFAs, bring this home within a modest annual flat fee, while allowing unlimited transactions and unlimited fund size. Above all, do something different.

The platform route

We engaged not only professional website builders, but also ones with direct experience in building IFA websites. We realised that using a platform was the only option and tested what was out there against our requirements. Cofunds won.

We had meetings, think-throughs, wire diagrams, orderings, re-orderings, envisionings, re-envisionings, dummy runs, guides, copy, cartoons, video, and more meetings. A lot of energy went into eliminating complex products and procedures. Potential operating errors that subscribers could make were ‘de-banana-skinned’ because every negative would eat into our already slim margin.

Even now, with a product to offer, we feel the process has just begun. Fresh ideas are flowing and mark two is in mind.

Peter Hargreaves

Executive chairman, Hargreaves Lansdown