Speaking at the Platform Evolution conference in London last week, FSA senior associate for investment policy Steve Tully said if advisers stop using platforms because they do not re-register assets off, this would encourage providers to focus on the issue.
He said: “The one thing I would say is that if this is a very important issue for you as a firm and an important issue for your clients, then this is something you should take into account. Logically, if advisers as a whole decide that this is an important issue, then I would have thought new business volumes of these platform would start to waive. Perhaps, why don’t you use a platform that allows it?”
The FSA is investigating how to move towards greater use of re-registration and Tully said: “If this is a very big issue, then you have got the ability to drive this change as well. In some ways, advisers collectively could change this.”
Tully said it was a fact that most platforms do not make money and that it was probable that some will “pack up their bags and go or their backers decide they are not going to give them any more cash”.
He said in these situations, it is likely they will be bought out but that you “cannot totally and utterly say” someone will not pull out completely, as was the case with American Express and, more recently, UBS.
He said: “If you did due diligence purely on risk at the moment, then you would have a tiny list of people to select from. It is more than that but whatever financial firm you talk about there is no cast-iron guarantees attached to that.”