Currently, he argues, the platform market is in a similar place to where companies like Amazon were 10 years ago - What the technology allowed was for clients to do the same things as they always had done, just a little bit more easily.
However, over time, with innovation, not only were the old things easier to do, but whole new ways of doing things became apparent.
In a similar way, to how it has revolutionised retailing, technology will change the nature of financial services partly because companies will become able to better interrogate the data they have on what their clients want.
There fits well into the other major trend within financial advice which is the growing demand for a heightened level of personalisation, Neilson said, which is predicated on the increasing focus on outcome-driven investments that are designed with specific needs in mind.
“The industry is waking up to the fact that old style product doesn’t work in a semi-permanent low-return world,” he argued.
Workplace pensions are a good example of this, he said, as they are unlikely to turn a profit, but they will provide a good client list that will make it easier to design products that clients need and want, rather than doing it the old fashioned way – designing a product and then looking for an audience.
And, it is here that platforms have a decided edge.
“There is a lot of money on advised platforms and it is not beyond the bounds of possibility that a platform could go to advisers and say, there are a number of you using one or two very similar products, what if we approach those managers on your behalf, organised a beauty parade and then negotiate a segregated mandate at a reduced rate.”
It is this kind of data interrogation that should provide more effective outcomes for clients, Neilson argues. But, while such developments are possible, they are not going to happen overnight in part because the level of innovation within the sector is currently constrained.
Within the platform space, Neilson explained, the level of regulatory change within the sector means that a large chunk of development budgets is taken up with mandatory regulatory adjustments. On top of this, he added, in most instances, the technology itself is antiquated, which makes some innovation very difficult.
“It is like trying to build an app for a Nokia 3310, it is just not going to work,” he said.
But, while there is a recognition that the technology is old, there has also been, until recently, a reluctance to upgrade it, because doing so is not only hugely expensive, but it also involves a sizable amount of reputational risk.
“It is very hard to maintain service levels while you are undertaking a replatforming,” Neilson explained.
The other reason that platforms have been reluctant to innovate heavily is that for a long time the advisers themselves have been satisfied with what they were getting and, importantly their demands were not overly complex.
Since RDR, however, that has changed.
“All of a sudden platforms have clients with wildly different demands,” Neilson said, “There are those that want complete integration into the system to monitor risk levels, others want all manner of investment tools. The minute we cannot host the client offering that advisers want we become a questionable proposition.”
As a result, the platforms are beginning to make a move with many either in the middle of, or beginning to overhaul their systems. Now it becomes a matter of time.