How LISPs are powering adviser growth

For many financial advisers, the rise of linked investment service providers (LISPs) has been nothing short of transformative. What once required multiple contracts, endless paperwork, and limited investment choice is now accessible through a single platform.

“Think of a LISP as a supermarket for funds,” explains Daryll Welsh, Head of Product for Ninety One Investment Platform. “Thirty years ago, if you wanted to buy a Ninety One fund, a Coronation fund, and an Allan Gray fund, you needed three separate application forms, three accounts, and three processes. It was time-consuming and cumbersome. LISPs changed all that.”

By interposing themselves between advisers, clients and unit trust companies, platforms opened up unprecedented choice. With one application, clients can access a wide range of funds across multiple providers. Over time, LISPs added ‘wrappers’ such as retirement annuities, living annuities and preservation funds, allowing investors to diversify across fund managers within the same product.

This open-architecture model didn’t just benefit investors; it unlocked independence for advisers. “In the past, many advisers were tied to a single product supplier,” says Welsh. “Platforms enabled the growth of independent financial advisers by letting them choose the best mix of solutions for their clients, without being restricted.”

For advisers, LISPs have also simplified administration. Instead of juggling contracts with multiple providers, they manage client investments through a single platform, supported by reporting, performance analysis and portfolio management tools. Increasingly, technology is the differentiator. “We’ve invested heavily in technology to digitise the platform,” Welsh notes. “Advisers can now manage their entire client base online, including switching funds, drawing reports and tracking performance, all with greater efficiency.”

Price matters but so does quality

And what about cost? Welsh acknowledges that transparency is vital. “Pricing must be competitive, but advisers also look at the value they receive – whether it’s ease of use, diversification options, or technology that helps them scale their practice. Platforms that deliver on both service and innovation will stand out.”

However, as he points out, pricing is only part of the story. “At the end of the day, it’s about value for money,” he explains. “A platform must also deliver better outcomes for advisers and clients. Profitability matters too – it allows us to reinvest in technology, reporting and tools that make advisers’ lives easier and improve the client experience.”

This balance, says Welsh, is critical in a fiercely competitive industry where ‘cheap’ is not always sustainable. “Some platforms in the past went in with pricing that was simply too low, and eventually they had to reprice. That’s the worst situation for advisers, because they’re the ones who have to explain fee hikes to clients.”

Staying secure in a digital world

Another area where platforms must deliver is security. With most transactions now digital, the protection of client data and assets is paramount. “Cybersecurity is sacrosanct,” Welsh emphasises. “We regularly stress-test our systems with penetration tests to ensure resilience against sophisticated attacks. Information security is a core part of our business.”

South Africa, he argues, has much to be proud of. “For many years, our platforms were leading globally in terms of technology. Even today, I think we’re on par with, and in some cases ahead of, international peers. Where we lag slightly is in mobile app development for the end client; however, as most engagement still happens via advisers in their offices, this is not a critical issue to address right now, but that could evolve with younger generations.”

Where does the future lie?

Looking ahead, Welsh sees innovation centred on consolidation and simplification. “Clients want all their assets in one place for ease of management, just like they do with their banking. That’s why we’ve launched stockbroking capabilities alongside funds, so advisers can now bundle different asset types on one platform.”

The rise of crypto adds another dimension. While direct holdings in retirement products are restricted, platforms can already provide exposure via listed vehicles like ETFs in non-retirement products. “It’s moving slowly, but the building blocks are coming together,” says Welsh.

And then, of course, there’s regulation. “Compliance isn’t optional, it’s essential. Projects like the two-pot system require huge investment in systems and resources. Sometimes it means dropping everything to meet new requirements. That’s the reality of running a platform in today’s environment.”

Simplification leads to consolidation

A final trend shaping the adviser landscape is consolidation. “Five or six platform relationships were once common. Now, most advisers use two, maybe three. It simplifies their operations, makes client management easier, and allows them to scale more efficiently,” Welsh notes.

That means platforms must work harder than ever to earn and retain a place in the adviser toolkit – not just through pricing, but through security, innovation, compliance and, above all, the value they deliver. For advisers navigating an increasingly complex investment landscape, LISPs offer more than convenience. They are engines of growth, expanding choice, simplifying processes, and equipping advisers with what they need to build better portfolios for their clients.