“A good example internally at BT is post the acquisition of Asgard, we moved to a single fund manager governance unit, so we can have a single unit servicing fund managers that can then offer the distribution power behind our business through that single relationship,” he says. “It certainly adds efficiency to the process and allows fund managers to have a smaller number of relationships delivering to a larger audience.” As an open architecture platform, BT Wrap offers more than 600 funds to investors, but does not pre-package products or hand out mandates to funds managers. MLC, on the other hand, through its multi-manager investment process, awards mandates to managers who sit on its MasterKey and MasterKey Custom platforms.

In theory, as platforms grow, the slice of the pie available to fund managers via mandates increases, however Michael Clancy, general manager, investment management division at MLC, says assets on MLC’s platforms are widely distributed, with the exception of MasterKey. “MasterKey has had mandates in excess of $1 billion for many years now, and that has nothing to do with consolidation,” he says. “Those [funds managers] with a competitive edge will be able to command whatever price they want. But in every market there are benefits of acquiring services at a large scale. As platforms become larger they can negotiate an attractive fee, at least for the incremental dollar.” Insurance to be next battleground.

A possible by-product of consolidation, particularly where life companies like Aviva are brought into the mix, is the proliferation of risk insurance products on platforms. “Because more of this business is now transacted with a fair amount of involvement of life companies, we’ll probably see more products becoming available on the platforms. For example risk insurance, which does exist in a lot of these platforms but not to any great extent, could be pushed a lot harder,” Solomon says. “So we could see a lot more variety occurring, not just investment options but insurance options of various kinds.”

Solomon says industry funds, which in a sense are platforms as well, have “already got a march on the retail platforms” when it comes to insurance, with many having expanded and improved the type of products available and increased the amount of cover being offered. According to Plan for Life, industry funds’ group life in-force annual premiums totalled $923.13 million as at 30 June, 2008, up from $732.85 million the previous year and $579.88 million in 2006. In comparison, group life in-force annual premiums into platforms and master funds totalled $495.48 million (corporate) as at 30 June, 2008 and $626.58 million (personal), up from $478.43 million and $496.58 million respectively the previous year.