I’ve been an avid golfer for decades. I may not have been around during the sepia-toned days of hickory shafts and persimmon balls, but I can still remember when a drive of 250 yards was deemed pretty impressive.
At least at the pinnacle of the sport, that era is long gone. The length of the average tee shot on the US PGA Tour is now in the region of 300 yards, with the biggest-hitting professionals often topping 330.
This spectacular progress has relatively little to do with an improvement in skills. It’s technology that has really made a difference. Clubs are nowadays designed to hit balls straighter and further, while balls themselves are designed to fly significantly greater distances.
Pros, amateurs and hapless hackers alike can reap the benefits of these advances. Barring total shanks, anyone who steps onto a course is likely to enjoy the exhilaration of extra yardage.
Yet sweeping disruption invariably comes at a price. The problem in this instance lies in infrastructure. In effect, golf is rapidly outgrowing some of its most celebrated venues.
Take the Old Course at St Andrews, which dates back centuries and features many holes that are conspicuously short by today’s standards. Hemmed in on all sides, this most historic and revered of layouts has literally run out of real estate in trying to accommodate the modern game.
Needless to say, I don’t mention all this merely because I like rattling on about golf. The issue instead springs to mind because something disturbingly similar is happening in the platform arena.
Inadequate
Here, too, tech is relentlessly reshaping the landscape. Here, too, existing infrastructure is being found wanting. And here, too, many responses are inadequate.
By way of illustration, consider an Investment Trends study published last year. A record-high percentage of advisers said they were satisfied with their platforms, yet over half of those surveyed also called for deeper integration of systems.
In other words, stakeholders’ appetite for tech-enabled efficiencies is sizeable. Just as golfers yearn to wallop the ball as far as possible, advisers – along with their clients – want the process of investing via a platform to be as smooth as it can be.
Crucially, this means the process must continue to get smoother. Expectations won’t be met overnight and never raised again. Additional enhancements – some incremental, some radical – will always be the order of the day.
So which platforms might struggle in the face of near-constant change? In my opinion, broadly speaking, there are two pitfalls to contend with: falling off the pace and, less obviously, getting too far ahead of the curve.
The former is more common at present. As highlighted by various reports, concerns over the use of outmoded tech have been on the rise for several years. Critics have drawn attention to failings ranging from week-long portfolio rebalancing to the supposedly imminent collapse of the links between platforms, discretionary fund managers and model portfolio services.
Such shortcomings usually boil down to a question of resources. It takes time, money, expertise and experience to react to every development and demand. Piecemeal upgrades and stopgap solutions might hold the fort for a while, but they’re not the stuff of genuine sustainability.
This perhaps explains why some of the market’s newer entrants stray too far in the other direction. Entirely unencumbered by “legacy” infrastructure, they convince themselves that the best way to make the most of a blank canvas is to immediately leap beyond the cutting edge – which is seldom a prudent idea.
It’s a bit like building a golf course that measures 10,000 yards. Sure, there might just come a day when technology renders such a monumental figure realistic, but what would the attraction be until then? It’s just too “out there”. It’s a risk.
That leaves us with those platforms that are resourceful enough to keep up with innovation yet sensible enough to remain pragmatic. My chosen golfing parallel would be Augusta National, fabled home of the US Masters.
Although it was constructed almost a hundred years ago, Augusta has consistently proved capable of moving with the times. Holes have been repeatedly tweaked and stretched to cope with the advent of better equipment.
There’s no sensational secret behind this approach. The club’s members have simply resolved to preserve the course’s status among the elite – and it’s a trick they’ve been able to pull off again and again by drawing on the necessary funds, wiggle room and determination.
Platform providers increasingly find themselves confronted by much the same challenge. We have to demonstrate we possess both the wherewithal and the willingness required to stay relevant. The bottom line is that in our world, as in the sphere of golf, we can’t hope to fulfil our potential by standing still.
Gary Player, one of the finest golfers ever, once summed up his success by declaring: “The more I practise, the luckier I get.” That sentiment resonates. Ultimately, the platforms most likely to deliver optimum outcomes for their stakeholders are those that knuckle down, invest and adapt.
