In its response to the FSA’s RDR consultation paper, Aegon says where platforms provide similar functions to product providers they should be “subject to equivalent regulation”.
The response says: “This should apply to TCF responsibilities as well, so platform providers need to review their target markets, assess whether solutions are designed to meet identified needs and engage with distributors on mutual responsibilities.”
Aegon is also calling for higher adequacy requirements in the platform arena. It says platforms are not subject to the same capital adequacy requirements as insurance companies but are essentially competing with the packaged products offered by the latter.
The firm says: “This creates a potential danger for consumers as recently witnessed by the failure of a small Sipp provider where the investors could potentially face a significant tax bill left by the Sipp provider.”
Aegon also believes advisers should use more than one platform. It says: “We struggle to see how adviser firms using a platform or wrap that uses a single provider product/tax wrapper can satisfy the new standard for independence. Some wraps or platforms do not offer completely open architecture and instead use a single provider’s product or tax wrappers. If products were completely commoditised, then this would not raise issues. But they are not, and we do not anticipate them becoming so for the foreseeable future. For this reason, Aegon does not believe a single wrap which does not offer completely open architecture is consistent with independence.”