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Threesixty raises concerns over adviser platform deals

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Threesixty says the FSA may look to ban advisers from taking margins from platforms under distribution deals.

Threesixty managing director Phil Young says deals that allow advisers to take a cut from the savings they negotiate for clients should be banned.

He says the push for greater transparency under the RDR in a bid to improve trust in financial services could be undermined if the national media exposes platform distribution deals as hidden charges.

Young says if the deals are allowed to continue, the FSA should enforce a standard illustration of platform charges and adviser firms should be forced to clearly disclose the price of the platform, with and without a distribution deal.

He says: “The FSA should introduce a compulsory standard illustration and a one-page summary showing at a high level where the money is divided up.

Certainly, if a white label is used, the price of the platform without the white labelling should be clearly disclosed or preferably white labels just banned outright.

“The practice of advisers taking margin directly from the platform may well be banned by the FSA as it is getting too difficult to police and manage conflicts of interest. Our own preferred view is for advisers to discount the platform using their purchasing power, not increase it.”

Sesame currently white labels Axa Elevate to power its platform proposition, Sesame One, which launched in November 2010.

Sesame Bankhall Group chief executive George Higginson says: “We make sure we have a rate through the platform that is lower than the retail price and as a result the client and the adviser get a better deal. We do make some money out of it.

“Currently, post-RDR structures are unclear but Sesame will adapt to whatever structures emerge.”

The Lang Cat principal Mark Polson says: “The direction of travel means the FSA probably will look at this because these payments appear to look like commission and are at odds with the RDR.”

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Readers' comments (7)

  • Where is it going to stop?

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  • says 360 who are owned 100% by Standard Life ! theres an independent view then !!

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  • What a load of tosh!

    An adviser who does more work and negotiates a discount is entitled to something for that work. As long as it's declared to the client, so it's not a secret profit, what's the problem? And what's the problem if clients want their adviser to be paid in that way?

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  • The most significant problem is not where the revenue comes from a cut of the money saved but where the cost is actually increased to the client, which is pretty blatant in some cases. It isn't a share of the savings if it costs more.

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  • Each party should be paid directly by the person they are providing a product or service to and paid only for the bit they are doing. Simple, straightforward, ethical The money goes from A to B only.

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  • Rule by fear. Possible because the FSA are pushing through a process that makes little sense, and their explanations make even less sense.
    But hats off to 360 for making it a selling opportunity, which of course will soon be a dirty concept.
    Will those who pass their exams be granted a certificate or ordained?

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  • why would you get a stake if the platform didn't think it would influence ? i read another post that called this Distributor Influenced Platform. I see the regulator coming calling

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