Investors spend hours analysing a fund’s track record yet rarely ask who’s holding their investment or under what licence. Take three people who put money into the same equity strategy, run by the same manager. One through a unit trust, one through an endowment policy, and one through a segregated mandate. A year later, their costs and who’s accountable if something goes wrong look nothing alike. How you hold an investment, matters almost as much as what you invest in.
Investment platforms come in four distinct shapes; each built on a different licence and suited to a different investor need.
- A LISP (Linked Investment Services Provider) is an administration platform that allows an investor to hold unit trusts, ETFs and other funds from different managers under one contract, one login and one statement, like a supermarket shelf for investments.
- A CIS (Collective Investment Scheme) Manco often operating as a white label platform, allows an asset manager to run their own co-named funds under the Manco’s licence, handling the governance, compliance and trustee oversight, so the asset manager can focus on managing money without setting up a Manco of their own.
- An investment-linked insurance platform holds an investor’s money inside a policy issued by a life company, not directly, like in a unit trust. Because it runs on a life licence rather than a CIS licence, the insurer can pool investors’ money into portfolios that work much like unit trusts, but with more flexibility to hold illiquid assets such as private equity and infrastructure.
- A segregated mandate is a dedicated portfolio built just for one investor under a bespoke agreement, not pooled with anyone else’s money, typically reserved for large institutions.
A licence is therefore more than a permission slip. It’s a platform’s entire risk and governance framework, covering oversight, accountability and supervision for as long as the licence exists. That’s what really separates a LISP, an insurance platform, a CIS Manco and a segregated mandate. It’s not just what they can hold, but who is checking, and how often.
In the SA financial services landscape, every FSP (Financial Services Provider) faces the same choice: apply to the FSCA directly for a licence, or partner with a platform that’s already licensed. Building your own FSCA licence requires fit and proper key individuals, adequate capital reserves and months of process; whereas partnering with a platform, bundles all of that in from day one.
For trustees of retirement funds, who face the same choice as an FSP, the stakes are different. When members’ money is on the line, trustees have a legal duty to act in members’ best interests, so they must check the platform’s governance too, not just the manager’s track record.
Regulation 28 of the Pension Funds Act limits what SA retirement funds can hold, but since January 2023 it allows more room for private markets: up to 45% in infrastructure, 15% in private equity, including venture capital, alongside listed shares and up to 45% offshore. Meeting these limits well takes more than a manager alone, it takes a platform pulling its own weight too. An investment linked insurance licence is particularly well suited to this because the insurer isn’t bound by a unit trust’s liquidity rules, it can hold listed and private assets together in one policy.
For retirement funds, a platform earns its keep. Running on a licence means built in checks; a custodian watches the money, a regulator watches the platform, and trustees don’t have to watch everything themselves. It also gives the fund one clear view of what it holds, plus access to managers and pricing it couldn’t get alone. The trade off, however, is extra fees on top of what managers already charge, exits that can be administratively heavy and slower, and a narrower pool of managers to choose from.
Whatever its shape, a good platform brings economies of scale and oversight that would be hard to replicate alone. The real dividing line between a strong platform and a weak one is governance, and that’s the test every adviser, trustee and asset manager should apply before trusting it with client money.
There are various platform services that brings both licences together under one roof, giving retirement funds and asset managers the flexibility and governance they need, turning two licences into one answer: the exposure the investor/retirement fund needs, backed by governance you can trust, delivered through a single partner.