Platforms are spending almost half of their development budget on regulatory compliance, the Investment Trends 2013 Platform Report found.
The research covered 454 key characteristics of 13 platform providers and found that spending on developing new functionality was only slightly greater than spending on regulatory compliance.
However, adviser demand for better usability, reporting and support continued to drive intense competition, which resulted in a number of improvements in functionality.
"The level of development is reflective of the high level of competition in the industry, Investment Trends senior analyst Recep Peker said, and added that "platforms can very easily be overtaken by rivals if they do not keep innovating and meeting planners' needs."
Platforms focused on developing usability, adviser support, reporting, direct shares and corporate actions functionality, as well as building fee disclosure statement (FDS) tools from scratch.
CFS FirstWrap topped the ranking of full-function platforms by overall functionality for the second year in a row for its navigation and user interface.
The platform achieved the highest score in the 10 years of the study and recent enhancements include a revamped adviser dashboard, customisable interface, easier client account establishment and a new direct equities capability.
netwealth was second, followed by Asgard eWrap, MLC Wrap & Navigator and HUB24.
The report also looked at platforms' response to FDS administration and found that the majority had developed tools able to track key dates and services provided and to generate FDS and alerts.
The most feature-rich FDS functionality was delivered by Asgard eWrap, followed by the Macquarie Wrap, which was equalled by the Perpetual Private Wrap.
The is based on analyst reviews comparing 25 master trust and wrap platforms across over 454 aspects of their service offerings.