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Disclose white-labelling costs, advisers warned

Threesixty has warned that failing to disclose the cost of white-labelling a platform could put advisers in breach of treating customers fairly.

Threesixty partner Phil Young has warned that advisers need to be alert to the potential treating customers fairly conflicts if advisers do not disclose to the client the fact some white-labelled platforms could be accessed more cheaply if they were not branded in the IFA firm’s name.

“White-labelled wrap platforms are now available which differ from the original only in that they add an extra 15 basis points to the cost, which the consumer pays for, and the distributors and its advisers carve up between themselves.

“While the benefits of the additional basis points are enjoyed by the distributor, and payments are disclosed in key features literature, there is no formal obligation to disclose to the client the fact that the same platform can be accessed at a much cheaper price.

Young adds: “There are some serious ramifications for everyone as it clearly contravenes TCF principles. This is perfect national press material which could bring consumer confidence in advice down at a time when the vast majority of advisers are doing an awful lot to improve it.

“A minority of advisers using wraps for the wrong reason may cause problems for everyone.”

Ascentric managing director Hugo Thorman says: “Where a platform provider shares the margin with the adviser, it is important that the adviser discloses that fact. Of course, if the adviser offers a platform at a higher price than the client could get elsewhere, that implies a higher level of disclosure from both a TCF and conflict of interest viewpoint and that fact should be disclosed as part of adviser charging.”

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