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From Retail to Institutional: Remove the Complexity of Platform Ownership

Complex to simple Graphene

The Growing Divide Between Retail and Institutional Platforms

For investment firms, the early years are often supported by retail platforms—a necessary entry point offering accessibility, automation, and ease of use. However, as firms grow, these same platforms become restrictive: higher costs, limited investment options, and lack of control start to hinder expansion rather than enable it.

The natural step forward is to move to an institutional-grade platform, but here’s the challenge:

1

The cost barrier is significant.

Many institutional custodians require minimum annual fees of £330k+, making them inaccessible to firms managing less than £2bn in AUM.
2

Operational complexity increases.

Firms moving to institutional platforms must manage static data, trade execution, and compliance processes—functions that retail platforms previously handled.
3

The transition is resource-intensive.

Many firms lack the internal expertise to navigate this shift efficiently, making the move feel like an operational burden rather than an upgrade.

For firms that find themselves in this “middle ground”—too big for retail, yet not ready to take on institutional-level costs and responsibilities—how can they scale effectively?

This is the challenge that the next generation of platform solutions is designed to solve.

The Roadblocks: Why Moving to Institutional Platforms is So Difficult

The transition from a retail investment platform to institutional-level custody is not just about switching providers. It’s about adapting to an entirely different way of operating.

1. Cost Pressures: The Entry Barrier is High

Institutional custody platforms offer greater flexibility, but at a price.

  • Many custodians charge fixed annual fees, often upwards of £330k, meaning firms need at least £250m–£500m in AUM just to break even.
  • This upfront cost discourages many firms from making the move—even when their existing platform is no longer fit for purpose.

2. Complexity: More Control Means More Responsibility

Institutional platforms provide more control over fees, trading, rebalancing, and reporting. However, with that control comes greater operational responsibility, including:

  • Data management: Firms must maintain static data, client records, and account structures.
  • Regulatory compliance: Managing MiFID II reporting, best execution, and audit trails without relying on an intermediary.
  • Investment operations: Handling trade execution, corporate actions, and cash processing in-house.

For firms used to retail platforms managing these functions, the transition can feel overwhelming.

3. Limited Expertise: The Knowledge Gap

Retail platforms are designed to be user-friendly and automated, requiring minimal expertise to operate. Institutional platforms, on the other hand, assume that firms have internal compliance teams, operations specialists, and IT support.

For mid-sized firms making the jump, this means:

  • Hiring additional staff to handle new operational requirements.
  • Building out internal compliance and risk frameworks.
  • Investing in technology integrations to manage workflows.

This resource-heavy transition often delays firms from upgrading—even when they know they need to.

A New Approach: Removing Complexity from Platform Ownership

Instead of forcing firms to choose between restricted retail platforms and costly institutional solutions, a new model is emerging—one that provides institutional-grade capabilities without the financial and operational burdens.

  1. Syndicated Cost Models: Reducing the Entry Barrier

One of the biggest challenges in moving to institutional custody is cost. However, syndicated cost models are changing the equation.

Rather than requiring firms to cover full platform costs individually, new models allow them to:

  • Share infrastructure costs across multiple firms.
  • Access institutional-grade services at a fraction of the price.
  • Scale gradually, without committing to high fixed fees upfront.

This makes institutional custody viable for firms with £250m+ in AUM—a segment previously priced out of the market.

  1. Expert-Led Implementation: Bridging the Knowledge Gap

For firms accustomed to retail platforms, the operational demands of institutional custody can be overwhelming.

Instead of leaving firms to figure it out on their own, new solutions provide:

  • Pre-configured platform setups, ensuring firms don’t start from scratch.
  • Best-practice operational frameworks, reducing compliance risks.
  • Ongoing support, acting as an “expertise on demand” function.

This removes the trial-and-error phase that often accompanies a platform transition, allowing firms to operate efficiently from day one.

  1. Modular and Scalable Platform Design

One of the challenges of institutional custody has been the all-or-nothing approach—firms either take on full operational responsibility or remain dependent on third-party providers.

However, modern platform models offer a modular approach, allowing firms to:

  • Start with essential services, such as custody and trade execution.
  • Gradually take on more control, integrating custom fee structures, bespoke reporting, and advanced trading strategies.
  • Scale up at their own pace, rather than being forced into full infrastructure ownership prematurely.

This phased transition removes the friction from moving away from retail platforms, making institutional-grade solutions accessible earlier in a firm’s growth cycle.

The Future of Investment Platforms: Owning vs. Renting Infrastructure

The shift from retail to institutional-grade platforms isn’t just a technical upgrade—it’s part of a larger industry trend toward embedded finance.

Historically, investment firms have rented their infrastructure from third-party platforms. This has meant:

  • Higher long-term costs, as firms pay recurring fees without ownership benefits.
  • Limited flexibility, as firms must operate within the constraints of their provider.
  • Reduced control over pricing, trading, and client experience.

However, with the rise of Investment Platform as a Service (IPaaS) and embedded finance solutions, firms now have an alternative: owning their platform infrastructure without the traditional barriers of cost and complexity.

The key benefits of this shift?

  • Cost-efficiency: Moving away from high-percentage platform fees.
  • Full control: Customising everything from investment models to client interactions.
  • Long-term scalability: Firms no longer have to “outgrow” their platform—they build it to fit their needs from the outset.

This represents a fundamental change in how firms approach their platform strategy—moving from dependency on external providers to autonomy over their own infrastructure.

The Firms That Make the Move First Will Lead

The transition from retail to institutional platforms has long been seen as a costly, complex, and high-risk shift. But as new solutions emerge, the barriers to entry are falling—and firms that move early will gain a significant competitive advantage.

The old dilemma—”Do we stay on a retail platform that limits us or move to an institutional model that overwhelms us?”—no longer applies.

The future of platform ownership is about flexibility, scalability, and removing complexity from the transition process.

For firms that are serious about growth, the question is no longer if they should move—but how soon they can make the transition without disruption.

Because in an industry where technology, service, and operational efficiency are defining the next generation of winners, firms that remain stuck in the middle ground may find themselves left behind altogether.