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RDR: Platforms must get on with it

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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.

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Readers' comments (20)

  • Wise words. Ditto all around.

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  • Who are Novia? In what way is their platform any different from all the other established platforms?

    I've never received any contact from anyone at Novia or seen any articles about them so I've no idea what their proposition might be. Perhaps they're entering the game a bit late in the day and will never gain significant market share, as happened with Selestia, despite coming up with all sorts of fancy risk modelling systems which many IFA's just didn't have either the time or interest to try to get their heads round.

    Then again, Novia may turn out to be a rip-roaring success. Who knows? For now, it's just another name somewhere on the fringes.

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  • Provided neother platform nor wrap are allowed any form of rebate I'm in favor. I would have thought that additional shares classes would solve this problem but some from the wrap world seem to want to continue to use rebates. Hopefully the FSA will not allow this and we can move on to a world where the consumer can see the cost of the fund, the cost of the platform and the cost of the advice. And, if of course, they don't want or need the advice they can simply deal direct with the wrap or platform.
    It would surely be wrong if some wrap providers were to insist that client had to deal through an adviser.

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  • Julian - maybe you dont have the time, but any cursory glance at freely available sites -eg Platforum, Which Platform, will tell you quite a bit about Novia, and they are very competitive, as are Ascentric, Avalon, & Nucleus. I use Transact by the way, but under due diligence etc etc I cant rule out a change.

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  • Julian, to answer your question, my 2 minute due diligence: Novia seem to be a genuinely independent wrap, though the availability of investment seems to be tied through agreements with providers (i.e. very wide range, but not everything); can't make out whether bundled or unbundled pricing from a simple look at the website though...

    I *do* think it would help if MM and the rest of the trade press were to concentrate more on providing detailed comparisons of the Platforms, state of RDR readiness etc - rather than all these infomercials!!!

    I mean, why not just let Bill, David F and others from non-LifeCo wraps answer IFA questions like this?!?

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  • Nice to see Julian is his normal self.... highly informed about the market.....

    I personally blame the FSA! :))

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  • All this crap ! It's an unwise man that knows the cost of everything and the value of nothing....or something like that.

    Consider what every platform provides against what was available for investors just 10-15 years ago. That's not good enough for the FSA - now they want the platforms (having spent millions on the development costs) to manage on virtually nil profits.

    The fact is that it is regulation and the FSA that now weighs heavily (directly and indirectly) on the cost of financial products. Someone has to pay for the inflated salaries, gold-plated pensions and other perks of the FSA, FSCS, Ombudsmen, ICO and tens of thousands of compliance officers. I'm all in favour of getting rid of the cowboys and also some sensible oversight of the industry but it has all got out of proportion - the FSA is a disastrously incompetent, monstrously expensive, self-serving quango which has added massively to the costs of every financial product and associated advice when needed.

    And, when the FSA has driven every last IFA out of business, their rulebook will be powerless in preventing the banks from ripping off customers in the future.

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  • To answer Man In Black, Novia is an independent open architecture wrap with a 100% unbundled pricing structure ( all rebates are passed to the client). The wrap is fully RDR ready with clean air between the cost of advice, wrap & Investment instrument. ( ETF, Investment trust,collectives, equities, Hedge, cash accounts, structured products etc)

    There are a number of other features unique to the wrap such as a gross nominee account which is fundamental to clients investing via SIPPs either Novia's or an other, Third party offshore bonds, Section 615, Qrops, etc. This can make £1000's of difference to the client

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  • Hi Paul, that's genuinely helpful. In a few short sentences, I think you've told us all a lot more about your proposition than your colleague's infomercial did! Many Thanks.

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  • @ Paul B
    I think Ascentric offer gross nominee as well so not "unique".
    Agree with MIB - what is needed is easily comparable info (platforum and market watch are doign this i think) - some of our most time consuming research has been working out the best "host" for clients assets; and im still surprised that some advisers seem to think this is an unnecessary piece of an individual audit trail though, when it can save clients thousands of pounds. Its an ideal way of demonstrating added value surely.

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