FSA rules to cost platform industry £55m in one-off costs
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The FSA has estimated the platform industry and other associated firms face total one-off costs of £55.4m to comply with the FSA’s policy statement on platforms.
The FSA published its policy statement on platforms this morning. It has delayed a decision on cash rebates until further research is carried out into the implications of the rules.
A ban on payments between platforms and fund managers has been proposed for the second time, after the FSA originally suggested the move in March 2010 but retracted the proposal in November.
The regulator does not expect advisers to incur additional costs above the costs of meeting other RDR requirements.
Other rules set out in the platform paper include the timely provision of information to investors on voting rights and changes to funds.
Platforms will have to pay for the bulk of total compliance costs. The FSA estimates that out of the total £55.4m in one-off costs, £40.4m of this will have to be met by platforms.
Fund managers are expected to pay £2.9m, while other firms classed as ‘intermediate unitholders’ such as Isa and Sipp providers are likely to pay £12.1m.
Ongoing costs across the industry are estimated to be £48.4m with platforms paying £20.4m, intermediate unitholders paying £28m, and fund managers paying no ongoing costs.
The FSA says: “We do not believe that advisers will incur costs additional to those they will incur to comply with other RDR requirements.
“The usual due diligence process will apply to advisers whether or not their clients invest through a platform, and therefore we would expect advisers to go through very similar processes when they are using a platform compared with investing directly.”
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