Platform Financial Strength Assessment Reports
These AKG Financial Strength Assessment Reports cover selected companies operating in the Platform Operator Rating Sector.
Purpose of Reports
In the UK, financial advisers are required to consider the financial strength of organisations with whom they deal. Others also need information on which to assess platform operations.
AKG Platform Profile & Financial Strength Reports are designed to meet the information needs of advisers. The reports seek to cover the primary platform service providers operating in the UK intermediary market.
Assessment Reports Format & Coverage
AKG’s focus and approach has remained consistent over the years since it commenced assessment and rating support for the market. However, coverage, format and presentation has rightly evolved over this period, in line with the needs and expectations of assessment and rating users in the market. And AKG considers further changes on a continual basis.
In 2017 AKG made specific, significant format improvements to the Financial Strength assessment reports for the benefit of users. The reports being a primary mechanism for the distribution and explanation of the AKG assessments and ratings.
In summary these improvements:
• Take account of new statutory reporting information from insurance companies, under Solvency II, where appropriate
• Align report sections to better reflect the most important aspects considered in assessment and rating; including a specific background section in the full participatory report for ‘Parental & Group’ context and then drilling down on distinct, ‘strategic’, ‘operational’ and ‘financial’ areas at the entity level, at which ratings continue to be given.
• Give greater prominence to key assessment comments, improving ‘at a glance’ readability and better communicating reasons for specific ratings
• Update the supporting ratings (the non-financial strength ratings) to specifically indicate assessment for ‘Business Performance’
• Enhance identification of the reports with the sectors covered (including with the use of specific colours), for further clarity and to emphasise AKG’s comparative sector approach.
Styles of Report Published
Two different styles of report are published:
- Participatory Reports - For each of the platform operator companies in the market which participate in the production of the reports, a participatory report is issued, containing detailed analysis of all relevant aspects of its long-term business operations, together with a comprehensive set of AKG ratings - Financial Strength Ratings at an overall Platform level; together with Supporting Ratings for the key areas of Image and Strategy, Service and Business Performance.
- Non-Participatory Reports - For remaining platform operator companies where there is sufficient intermediary market demand, a non-participatory report is issued, containing an abbreviated analysis of the major aspects of its long-term business operations, together with a Platform Financial Strength Rating.
Each report collates relevant information from a range of sources such as a company’s regulatory returns, its report & accounts and material provided by the companies themselves, and incorporates expert independent assessment. For Participatory report companies, the process is augmented by regular meetings and communications with AKG.
Rating Only Approach
For some platform operator companies which are assessed and rated by AKG no report is produced. This is due to a low level of market demand for the additional supporting details delivered by means of a report. However, the same methodology is used in the production of ratings for such companies as is used for those assessed on a public information basis and which have a non-particiaptory report issued.
Ratings for platform operator companies are contained in the AKG Rating Portal together with some background supporting information and these ratings form part of the wider rating population delivered through leading third party selection systems.
To Purchase Reports
AKG Financial Strength Reports within the platform sector can be purchased online for immediate PDF delivery at £23.50+VAT for each report.
The complete set of Platform Financial Strength Assessment Reports can be purchased online as a Report Bundle at £325+VAT. As an added benefit, the purchase of a Report Bundle also provides a year’s online access to any new or updated reports that may be issued.
Alternatively, you can contact AKG.
Definition of Platform Service Provider
Defining the extent and boundaries of the platform market or what organisations can be deemed to be platform operators can be difficult and regulatory bodies acknowledge that activities differ among platform models and that the core function of a platform service may evolve over time.
Following various policy statements the FSA (now FCA) introduced a definition of a ‘platform service’ as a service which:
- involves arranging and safeguarding and administering assets: and
- distributes retail investment products which are offered to retail clients by more than one product provider; but is neither:
- solely paid for by adviser charges; nor
- ancillary to the activity of managing investments for the retail client.
Review Process and Report Issue
Each report is updated at least once a year, following extensive assessment of the latest statutory financial data, together with other financial and supporting information and, in the case of Participatory report assessments, further interrogative elements.
However, the underlying AKG assessment process undertakes ongoing monitoring and review of assessments and ratings throughout the year. This means that whilst always taking a ‘long term view’ of financial strength and adding depth and richness of data through the annual revision process, the assessments, ratings and their reports are part of a constant, dynamic process and can be reissued if required at any time.
Availability of Information
AKG has attempted to obtain as much detailed information (particularly of a financial nature) as possible about each of the companies profiled in this series of reports. However, the depth of information available to AKG varies from one company to another, for the following reasons:
- the information about platform providers which is available within the public domain varies greatly from one company to another.
- the extent of additional information made available to commentators such as AKG (on a voluntary basis) varies greatly from one company to another.
- some companies have disclosed information to AKG, but on a confidential basis, so that AKG is unable to publish it within the relevant report.
AKG's aim is to publish comparable information, presented in a consistent manner, for each company. Where this has not been possible, due to the information not being forthcoming from the company concerned, blank tables are shown. AKG's approach to rating companies which do not supply relevant information is naturally much more cautious than for those that do.
Format of Reports
N.B. Reports issued prior to 1 September 2017 for this sector were called Platform Profile and Financial Strength Reports - brief details of the information published for each type of report can be found here for Participatory Reports and here for Non-Participatory Reports.
Guide to AKG Ratings
A detailed explanation of AKG's methodology underlying the determination of the ratings published in its series of Platform Financial Strength Assessment Reports can be found here.