RDR: Platforms must get on with it
We at Novia were delighted to see in the much anticipated recent RDR papers that the many good things we had been calling for had not been watered down by pressure from elsewhere in the industry.
It is worth bearing in mind the whole thrust of the RDR is to get better outcomes for consumers and once we get over the pain that ‘change’ inevitably brings, the future looks brighter for all of us.
The industry needs to re-build trust amongst consumers and core to achieving that goal is the principle of transparency which the RDR champions. As part of that Adviser Charging is now agreed and will deliver transparency in how much advisers get paid but I really cannot understand the attitude of some platforms who are sticking their heads in the sand and resisting making the arrangements between fund managers and the platform equally transparent - customers should be able to see what is happening to their money and what they are paying for. When someone resists transparency there is always a reason for it – just ask our honourable MPs – and it is always vested interest.
As well as lack of understanding of who is getting paid what, the FSA also points out the potential for opaque deals between fund managers and platforms to distort the outcomes to clients for product choice, how portfolios are constructed and (mis)guided architecture (I never really have understood this one). Let’s all hope the FSA sticks to its guns and insists upon the arrangements between platforms – which are there to give access to the wider investment market after all – and the asset providers being clear to all and leaves no room for hidden arrangements and bias to creep in.
We are also delighted to see that the FSA has said that it plans to make re-registration between platforms mandatory. We are only disappointed that they are not insisting upon this until 2012. Just to be clear, the work in re-registering assets onto a platform is the same as re-registering off. The platforms that are resisting it today are doing so only out of putting their own interests ahead of those investing and they choose to hide behind complexity, systems development etc etc.
So my advice to the platform market is , let’s welcome the good things in the RDR and to those that are resisting change – accept the inevitable and get on with your systems changes (you’ve got a lot to do in a rapidly decreasing time frame).
Bill Vasilief is chief executive at Novia.