D2C vs. adviser platforms - what's the difference?


With so many platforms available to investors, it pays to know the key features between the different types available.

There are a variety of platforms currently on the market but ultimately they are divided into two categories: D2C (direct to consumer) and adviser platforms. Here we outline the key differences and features between each type.

D2C platforms

As the name suggests, these are platforms where the consumer can manage their investments directly. Many consumers find this set up ideal as it cuts out the middleman. If you feel confident enough to make your own investment decisions and want to fully remain in control, then a D2C option may be suited to you.

There are D2C platforms which cater to investors with varying levels of experience, meaning you don’t necessarily need to be an expert in order to be a direct investor. For example, some platforms have starter portfolios which are categorised into varying risk and objective ratings. D2C platforms could be an ideal opportunity for those who feel as though they cannot afford financial advice or for those who feel uneasy about handing over a portion of their investment to an adviser each year. This set up ensures that everyone has the opportunity to invest regardless of their situation, views and experience.

The issue with D2C platforms is that consumers often struggle to pick the best option based on their circumstances. The investment platforms study recently conducted by the FCA outlines how consumers find it difficult to shop around, particularly when it comes to finding the most appropriate lower cost platform. The report also goes on to say that consumers often miss out on investment returns due to holding large amounts in cash. It would seem that to successfully invest directly, it is vital that consumers have the knowledge and do their research in order to make the best decisions.

Adviser platforms

These are platforms which clients can have access to with the support of a financial adviser. The main benefit of going down this route is that you have the peace of mind of knowing that your investments are frequently monitored by a financial professional.

Investing your hard earned money can be a risky venture. Many clients find it assuring to know that they have the expertise of a financial adviser on hand whenever they need it. Advisers will go through the process of assessing your financial objectives and your attitude to risk in order to select the most appropriate portfolio of funds for your circumstance.  Adviser platforms also contain a number of tools in order to assist them with their client’s investment management, such as CGT calculators, model portfolio management and client reporting information.

Another feature of advised platforms is that you have the option to have your funds managed on a discretionary basis. This means that funds can be quickly switched to coincide with changes in the markets as your investments are continuously monitored.

Some investors may dislike the idea of having to allocate part of their investment to cover adviser fees. However, the assistance of a financial adviser can give added value to a client’s investment and doesn’t have to be a ‘meaningless’ cost. Since AFH have decided to abolish platform fees, this means that there is one less cost to think about and could create the potential for your investment to grow further.

There is not one type of platform that is superior to another. Everything is dependent on your individual investment needs and objectives. If you would like further clarification on investment platforms or would like to discuss your investments, please give us a call or fill out our contact form to get in touch.

Confused by investment platform and fees? Get clued up by reading our article on what an investment platform is here.

This is for generic information only and is not suggesting a suitable investment strategy for you. You should seek independent financial advice that takes your individual circumstances into account prior to proceeding with any course of action.

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