Just to add to Holly's comments for those of you who are interested in how cash is treated on platforms we did run a report a few years ago that examines in detail the points made by Robin. With the caveat that some of this data may now be a little out of date, it should give readers some more detail on the subject.

The report: "Cash on Platforms: King or Joker?" can be found on our research pages. Just scroll to the 'White papers' at the bottom of the screne.

Whilst you eluded to the importance of taking into consideration the treatment of cash rates in any decision when choosing a platform, I believe you did your readers a disservice by not including these in your calculations.

The facts are, the interest paid on cash is a huge money maker for those platforms that don't pass on the interest they receive. To put in into context, during the height of the GFC around 30% of FUM was made up of cash. Whilst the interest rates at the time were also low, it could be safely assumed that the average interest rate attained between 2008 and 2011 would have been in excess of 0.75% or an additional 22.5bps. Even if a lower average of 10% we are talking about 7.5bps. It should also be highlighted that all this is irrespective of how much a client has invested.

Some would argue that in the current environment and hopefully future, the amount allocated to cash positions will reduce significantly to 2 or so %. Whilst I think whilst this will occur for some clients, on average it is probably going to be more like 5%. What also needs to be considered however is the lag within the system: investing after the receipt of transfers, switching between funds etc which IMHO probably equates to around around 3% over the FUM on a platform at any one time, taking the average cash position to 8% or so.

Now, we are currently in a low interest environment, which will continue for sometime, however what happens once the inflationary effect of QE eventuates, and interest on cash rises to 3% or higher? Just look at the Australian environment, where almost all platforms take on average 1% of the interest achieved from client deposits.

The facts are platforms are using cash as a hidden way to make money. As such, it is imperative that this is included in any assessment of platforms chosen, not as a separate area of consideration, like rebates on your favourite funds, but in the overall cost of using a platform.

I really appreciate the work The Platforum does with analysing the platform makret, however I am concerned about the impartiality of the analysis, when it fails to adequately include such an important factor in a calculation, especially when the major benefactor of it's omission is clearly the major sponsor of the report.

Yours sincerely,

Interested Observer.