Financial platforms arrived with a bang in the early 2000s, and have since transformed the way financial advice is provided in the domestic UK, US and Australian markets. But they have not come to dominate the offshore arena to nearly the same extent – yet, anyway.
The founders of Ardan International are convinced this is about to change – and are determined to help to make that change happen.
Here, the company’s chief executive, Richard Preston, shares his vision of this marketplace, and other thoughts, with International Investment’s James Fernyhough.
If you ask Richard Preston where the future of offshore financial advice lies, he’ll say, “platforms”. But then, he would say that, being the chief executive of one of the few platform providers that specialise in the offshore space – Isle of Man-based Ardan International.
Still, he makes a convincing case. Next to the slick, flexible technology of his recently-launched platform, the traditional offshore bond model can look decidedly clunky. On the surface at least – and certainly as he explains it – his platform can do everything a bond can, and a lot more besides.
As well as giving advisers access to any number of managed funds, the Ardan platform also allows them to pick their own stocks, switch currencies, and tailor their own tax wrapper, all without the hassle of switching funds between custodians, Preston, pictured, says.
“What we’ve got here is far in advance of what the life companies have themselves,” says Preston. “This is a much more efficient world.”
On the downside – depending on how you look at – this gives the adviser a lot more work to do.
Ardan International actually had its start as an intermediary-focused platform in October 2013, when it was named Acordias, backed by venture capital funding. (It took its name from an earlier but separate start-up also named Acordias, but which had been based in the UK and which had white-labelled the platform technology of another company.)
In 2014, the business – which was already established by this time on the Isle of Man – was acquired by UK wealth manager and stockbroker Rowan Dartington for an undisclosed amount. A few months later, it was rebranded as “Ardan”, which means “platform” in Manx.
Preston, whose background included having been one of the co-directors of the major UK Cofunds platform, and who at that point was already a director of Ardan, became its CEO in February 2015.
“The reason I decided to get involved was because I saw they got a number of things right,” he says, referring to the platform’s original formation.
“They hadn’t tried to simply retro-fit a UK platform to the market for an international platform; instead they said, ‘what does an adviser in the international marketplace need in a platform?’”
The answer, as Ardan is supplying it, includes the option of a choice of currencies, not just one; and, thanks to the tie-up with Rowan Dartington, a discretionary fund management option in the international space.
Today Ardan competes in the offshore space with the likes of Moventum, Platform One, Praemium, Capital Platforms and Novia Global.
And according to Preston, more than 40 advisory firms and several hundred advisers around the world are now making use of the Ardan package – the majority of them being British expats who are advising British expat clients.
He says Ardan is continuing to sign up “two or three firms a month” and thus far has terms of business with “nearly all” the leading QROPS providers, and is looking to add more DFM partners.
The offshore bond provider question
One of the key questions for a platform like Ardan, says Preston, is how it engages, if at all, with offshore bond providers.
Many in the platform industry tend to view offshore bonds as old hat, and destined inevitably to be superseded by platforms, a view that many advisers also share.
Sam Instone, the Dubai-based chief executive of fee-for-service offshore advisory firm AES International, is one of them; comparing a life bond to a platform, he says, is like comparing a cassette player to an iPod.
“They are the typewriter, before computers. They are outdated, they have a history of selling poor investments to people, and they’re probably not going to last in[to] the next generation.”
If Platforms are going to manage to survive, he says, they’ll need to reinvent themselves along the way.
Preston, though, takes a different view.
One of its attractions to life companies, Preston notes, is that it charges an annual basic fee of just 40 basis points, plus dealing charges, which he notes “are lower than a life bond’s”.
Recently Ardan began to work with a fellow Manx player, the life company RL360°. The deal is a first for Ardan, and Preston explains it as follows:
“The client fills in a life bond application form, sends that to the life company with a cheque for, say, £100,000, but signs a form saying they want the investments to be custodied with Ardan. In that case, the life company gives the money to us, and then the adviser can come in and use our technology to trade inside the portfolio.
“So the ultimate client is still a client of RL360°, but they know their adviser can run everything through our platform.”
Preston says this relationship has been a success, and is looking to forge similar relationships with other life companies.
“I truly believe we can work with life companies,” he says.
“And that’s why we’ve got dialogues [with many of them] going on at the moment.”