The figures lend weight to the “bigger is better” argument often put forward by those on the acquisition trail. “It really does reshape the markets,” Johnston says. “Now you’ve got the combined BT-Asgard with the most relationships, you’ve got CBA – between First Choice, First Wrap and Avanteos – and MLC tied for second, then quite a large gap back to the remaining players. As expected, it leads to a lot of concentration and consolidation.” Scale is a definite advantage for platform providers, providing a larger distribution footprint in the planner market and hence broader access to superannuation investors.

Rise of the platform oligopo ly But what power will these megaplatforms wield over funds managers, and do fewer players mean bigger mandates for those who are successful? Simon Solomon, managing director of Plan for Life, says consolidation is unlikely to have a huge impact on fund managers while funds under management remain depleted. He admits that fewer platforms, or a “semi-monopoly”, is more likely to see fund managers squeezed on fees than a highly competitive market, but says the sharemarket wipe-out has left little room for negotiations. “If you end up with fewer platforms, you end up with a semi-monopoly where five or six platforms can basically call the shots and there’s not much anybody can do about it,” he says.

“But where you’ve got 30 or 40 of them and there’s competition, the ones that are charging more have to keep looking over their shoulder to make sure they’re not losing funds to the more economical ones. “Bear in mind though [fund managers] have lost 30 to 40 per cent of the funds they had 18 months ago, so they’ve got a fair way to go before they even get back to square one. So to be offering any discounts at this stage would be more difficult for them to do, because they’ve lost a great deal of their margin and they have to try to get back there and hope that the market recovers in a reasonably short time.

Any further discounting is not going to happen in the short term.” In the long term, however, Johnston from Investment Trends believes the growing scale of platforms gives them more power to negotiate lower fees from the fund managers, and potentially reduce fees for investors. “Gaining scale can potentially gives you more scope to cut fees, which can be important when there is a lot of downward pressure on fees across the industry,” he says. On the flip side, Craig Lawrenson, national manager, product and strategy at BT Wrap argues consolidation offers benefits for fund managers, since they can have fewer relationships whilst targeting a broader market.