The platform industry has hit out at the Financial Conduct Authority’s decision to allow advertising payments between fund managers and platforms.
In its platform policy statement, published last week, the regulator says advertising payments between fund managers and platforms would be allowed to continue but that payments cannot be used to influence business flows.
It says: “We recognise that allowing the above payments gives rise to the possibility of abuse so that providers may still have the potential to influence distribution.
“If we see any abuse of the rules in this area, we will consider banning all types of payment between a product provider and platform service provider.”
The Lang Cat principal Mark Polson says: “It is incredible that the door should be left open to marketing packages. The point of advertising on platforms is to create bias and to generate profit which does not come through platform charges. This is counter-intuitive and will be something the FCA will come to regret.”
Threesixty managing director Phil Young says: “We have seen abuse of this situation in other parts of the market and I do not think the industry has any confidence that it will be any different in the fund manager and platform space.”
Nucleus chief executive David Ferguson says: “Hopefully this will be well policed by the regulator but it is at odds with the tone of the rest of the platform paper.”
Murphy Financial associate partner Adrian Murphy says: ”I do not see why the FCA has allowed this. Why create a new regime that is open to abuse? It seems ridiculous.”