MM Meets Ola Abdul, Fundment CEO

Ola Abdul may have started out as an “asset management guy” but the “entrepreneurial bug” soon took hold.

It happened to lead him to the chief executive role at Fundment, the platform provider — or tech firm, as it likes to consider itself.

“I’ve always been fascinated by technology and its capabilities, and what it can achieve if deployed correctly and efficiently towards a particular solution rather than just buzzwords,” he tells me.

In my view a platform business is a technology business that happens to operate in financial services

Having studied economics at university in Scotland, Abdul trained and qualified as a chartered accountant. He spent a few years at Aberdeen Asset Management and says he learned a lot from the experience. The clue’s in the company’s name as to why he may refer to himself as an asset management guy; although it’s undergone several changes since then and today goes by just Abrdn.

From there he moved to BlackRock and built a wider understanding of exchange-traded funds (ETFs) as part of the business’s iShares fund range.

In the asset management world, technology was about how to distribute and manage the adoption of ETFs, but over time Abdul realised there was a much bigger issue out there. Along with a few others who joined him early in the process in 2014, when Fundment was founded, he set about looking at the platform infrastructure used by advisers.

I don’t think you’d ever finish building the platform. There’s always some stuff you could do better

“Advisers started to use us when we didn’t even have a platform, which shows the problem,” says Abdul.

“People looked at what we had at the time and, although it wasn’t quite the right platform then, they thought it was better than some of the fully fledged platforms.”

‘Growing nicely’

The offering has since evolved and Abdul is proud of the firm’s nimbleness. Fundment supports around 200 companies and is growing by bringing on about two firms almost every day.

“We’re growing really nicely and everything we do is about making sure we understand what is important to advisers and what they care about.”

But it can be notoriously difficult for platforms to make money, or for new entrants to truly disrupt the market. Just how tough was it to break into the platform space?

We want firms that will truly embrace digitisation and automation processes and, if that’s the case, we’re there for them

“It’s a difficult one to answer,” Abdul admits.

He says it was about 2018 when Fundment fully entered the market, stressing it wasn’t really built as a traditional wrap platform.

“That gave us a competitive edge. We weren’t completely building blind. We sought feedback from advisers rather than giving them bells and whistles they didn’t want or need.”

The result, Abdul tells me, is a highly agile and structured platform.

“We’re not going to be the same as all the legacy platforms, but that’s what differentiates us. When advisers come to us, they see a platform designed specifically for how they want to operate today.

“We genuinely care about the partnerships we have.”

In most cases, size is useful only if complemented by strong technology, the correct culture and getting it right

Abdul isn’t afraid to seek feedback from platform users; he welcomes it. While at an event, he had a conversation with a paraplanner who shared their reasons for liking the platform: because it’s reliable, accurate and simple to use.

“That’s what it’s all about but I think that’s what platforms tend to get wrong. It can be very difficult to get right if the infrastructure isn’t there.”

‘Bedlam’

There’s been a flurry of activity in the platform market with several name changes above the door, the march of private equity, and various mergers and acquisitions. What does Abdul make of it all?

“It’s crazy. It’s chaos,” he says.

“Sometimes companies buy platforms, don’t seem to think about what it will mean for advisers, and then they sell them again within a couple of years. It’s absolute bedlam out there.

If platforms say they don’t have the expertise and look to outsource it, I don’t know what they’re doing within the industry

“But it’s early days and I think time will tell which of those platforms that are being bought end up delivering value.

“It’s fair to say these businesses are beginning to attract attention. Until now platforms have almost been the junior cousin of the asset management side of things. That’s where all the attention was going; that’s where the money was going.

“Asset management itself is going through real challenges. There’s a huge amount it needs to do to remain fit.”

He adds: “People are realising the wrap platforms hold significant value. It’s not a surprise companies want to plug in to the market.

“I imagine over time it will calm down and then perhaps we will see the emergence of new entities.”

New kid in town

Fundment still considers itself a new kid on the block but anticipates other players trying to muscle in on the market.

Abdul suggests we could see some corporates buy start-ups and launch a platform that way, although he warns of just how tricky margins can be.

Asset management itself is going through real challenges. There’s a huge amount it needs to do to remain fit

For him it all comes down to operational efficiencies and getting the infrastructure right in the initial phase; not trying to fix it when you have obtained scale.

With a “bit of luck”, and no doubt hard work, Fundment hopes to be profitable by the end of this year or early next.

“But that won’t stop us continuing to invest in the business as we want to retain the technology edge,” the CEO explains.

He namechecks Transact as an incredibly profitable platform to show it can be achieved in the space.

It’s not the same for all platforms, though, and even some of those sitting within larger groups struggle to make money, or even lose huge amounts, Abdul observes.

I imagine over time it will calm down and then perhaps we will see the emergence of new entities

With technology changes coming at an increasingly fast rate, have platforms struggled to keep up and invest in their systems? Has it become a case of bolting on other bits in a bid to paper over the cracks?

“I think it’s a real problem,” Abdul says. “It’s important for advisers to do their due diligence on platforms.

“Some of the legacy players like to highlight they are backed by a massive company; they outsource everything but build a clunky and operationally inefficient process and they carry on and carry on in that way.

“And then, eventually, the margin is not there and the investment is put under scrutiny and, by the time they do the analysis, the return on investment is not quite there, and then what do they do? They pull out of the market.

Advisers appreciate having someone who can solve a problem if it arises

“We have seen it happen over and over and over again.”

Abdul doesn’t hold back on whether some firms should remain in the market.

“There are still some larger players out there — some big names — that in my view have to either fix their operating model or exit the platform market.”

And he’s firmly of the view the technology used by platforms, and its source, are very important.

“We do not, and we will not, outsource anything. We just won’t do that. But some will look to do that for every problem they face.”

He sympathises with some of those platforms, however.

People looked at what we had and, although it wasn’t quite the right platform then, they thought it was better than some of the fully fledged platforms

“It’s a tough thing, running a platform every day. There’s a huge amount of data and I can see why it’s easy to say, ‘Let’s just outsource it to somebody.’”

Nevertheless, the firms that provide the outsourcing services could be an easy target if things go wrong, he warns.

“It introduces its own complexities as the technology is no longer in the platform’s control. You can’t write your own software to fix any issue as you would if your technology was in house.”

Efficiency and capacity

Fundment has only a small support team but they work closely with advisers and have a group of developers behind them to rectify issues quickly.

Abdul says the efficiency and capacity of the firm, thanks to good technology, would make it seem to the outside world like a much larger organisation than it is.

“My view is a platform business is a technology business that happens to operate in financial services.”

Fundment’s office is nestled in the heart of Fitzrovia in the capital and is surrounded by the likes of Netflix, Sony and Google’s artificial intelligence company, DeepMind.

There are still some larger players out there — some big names — that in my view have to either fix their operating model or exit the platform market

“All of these companies are operating in a certain sector, whether it’s electronics, entertainment, media or whatever, and they don’t tend to buy in technology; they make it part of their business,” says Abdul.

“If platforms say they don’t have the expertise and look to outsource it, I don’t know what they’re doing within the industry.

“I’m not trying to be harsh, but I think many experienced people in the sector, who have been in it longer than I have, would admit it’s true.”

Let’s face it, the best judges of a platform are likely to be advisers. For them, it’s often a case of ensuring the basics are right and the platform doesn’t make them look stupid in front of their clients.

“Advisers appreciate having someone who can solve a problem if it arises. They will challenge you if you get something wrong or if the service isn’t up to scratch, and rightly so.

Everything we do is about making sure we understand what is important to advisers and what they care about

“And, if something does go wrong, they want to know how quickly it can be fixed.”

Without giving away any names, Abdul tells me advisers have informed him about a big legacy company “slagging off” Fundment and suggesting they don’t use the platform but instead opt for the one it runs.

“The reason it gave was: ‘We’re big and they’re not.’”

The bad-mouthing of smaller players by big ones has cropped up in conversations Money Marketing has held elsewhere. And, while the market has been changing shape over the years, there still seems plenty of room for everyone to play — they may just have to work on doing so nicely.

But getting advisers to support their team is an important goal in survival. Perhaps platforms would do better focusing on their own tactics rather then getting too fixated by others’.

We’re not going to be the same as all the legacy platforms, but that’s what differentiates us

“In most cases, size is useful only if complemented by strong technology, the correct culture and getting it right; and, if you don’t always get it right, being able to fix it,” says Abdul.

As for the size of firms Fundment works with, it can vary substantially, with both big and small advice firms coming on board.

“What’s important to us is the firm’s culture and operating model, and how it wants to engage with the platform,” says Abdul.

Embracing automation

He acknowledges Fundment won’t be the right fit for everyone.

“We want firms that will truly embrace digitisation and automation processes and, if that’s the case, we’re there for them.

“Some firms will prefer a different approach or want a paper-based process, so we wouldn’t be right as that’s not really us.”

I’ve always been fascinated by technology and its capabilities, and what it can achieve if deployed correctly and efficiently towards a particular solution

Despite difficulties, advisers are often very loyal to the platforms they work with. Abdul takes pride in the fact he can’t think of a single platform Fundment hasn’t taken business from. He knows he can’t become complacent, though.

“Our pipeline of work is so long. There’s a huge amount we want to do this year. I don’t think you’d ever finish building the platform. There’s always some stuff you could do better.”

With that spirit, it’s clear his entrepreneurial mindset has won out.

This article featured in the June 2022 edition of MM. 

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