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FCA to investigate adviser platform choice

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The FCA is to review how advisers choose their platform and whether platforms are competing to attract advisers rather than improve client service.

The regulator has published its terms of reference for its platforms market study, which will look at whether platforms aid good investor decisions and whether they offer value for money.

The market study was first trailed the FCA’s asset management market study.

The FCA says advised platforms account for greater assets under administration compared with non-advised platforms, and suggests advisers’ preferences are likely to be a key factor in platform choice.

It wants to investigate the impact this on competition, and question whether adviser platforms are competing in the interests of the end investor.

The regulator argues platforms that are competing to win adviser business through tools and service may end up resulting in better client service.

But it says: “Consumer harm may arise if the interests and choices of the adviser and investor are not aligned.

“To understand whether advised platforms compete in the interests of the end investor we will assess the factors which determine why advisers choose a platform on behalf of their clients, the access platforms allow consumers, any restrictions they impose and the reasons for these.”

The FCA will also examine how adviser platforms deal with orphan clients.

The regulator adds: “We want to assess the impact advisers have on platform costs and quality, understand whether the benefits advisers secure from their platform are passed onto investors and how use of a platform has affected adviser charges.

“Considering these factors should enable us to draw conclusions as to the impact adviser firms are having on the platform market, how platforms tailor their offering to advisers and whether this is resulting in effective competition in the interests of consumers.”

Feedback to the terms of reference should be submitted to the FCA by 8 September. The regulator plans to publish an interim report by summer 2018.


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There are 9 comments at the moment, we would love to hear your opinion too.

  1. Nicholas Pleasure 17th July 2017 at 11:43 am

    Any time spent on this by the FCA is time that they could use more effectively resolving the problem of unregulated investments that are causing such loss to clients and those of us that fund the FSCS.

    Please FCA, get your priorities right. Regulated platforms are generally pretty good products and the choice of one over the other will be dependent on the needs of the client AND the adviser. No-one is going to loose all of their investment because their advisers chose Novia rather than Cofunds. It’s not as though the platforms are massively profitable.

    This is tinkering with a market that is working reasonably well, whilst people are being parted from all of their investment elsewhere. And the FCA looks the other way.

    The FCA is following the FSA into total irrelevance and incompedence whilst rewarding its board members handsomely.

    • The FCA virtually NEVER gets its priorities right, hence I continue to bang on about the need for an external body with the unassailable authority to set the FCA’s agenda for it and punish it when it deviates from that agenda.

      Mark Garnier has publicly admitted that the TSC would dearly like to be granted such powers but, in their absence, the FCA remains free to cock a snook at anything the Committee may put to it.

      What we’re seeing now is another slew of new and critically orientated regulatory initiatives, the primary purpose of which is to try to distract attention from the FCA’s own failings, as neatly encapsulated by Andrew Bailey’s reference to the FCA’s “sorry history”.

      Well, Mr Bailey, having identified this sorry history, what do you propose doing about it? So far, nothing that I can see.

  2. I don’t understand this borderline obsessive line on platforms, unless it is a helpful distraction to the real elephant in the room…. dealing head on with unregulated offerings via regulated firms….. now that is a real risk to the public’s finances!!

    • Sorry Steve

      But sorting this out does nothing for their (FCA) long term existance, career or earning potential.

      Its all self perpetuating, Fraud, mass miss-selling, huge dependence on FOS and FSCS all equals better job security, and bigger budgets to tackle said problems

      They are not going to crack open the golden egg to make an omelette are they ….it makes no commercial sense, especially as they can just ask and they get…… well not sure they even ask to be honest would “take” be a better word ?

  3. Good grief

    Have they not got anything better to do with their time AND our clients money ?

  4. Has the FCA nothing better to do ? Or is this just any easy mark?
    What were they doing when the banks were fixing LIBOR for the last 40 years. What have the really done about SWOP loan compensation, nothing of any consequence is the answer. They will just fiddle about wil platform charges, because cheapest will obviously be best !!!

  5. FCA, please list all firms who are making excessive profits from their platform activities.

    Then list all those advisory firms using platforms that are making excessive profits.

    If the list is empty or short then competition is likely working reasonably well and it’s very unlikely there’s a major competition failing.

    Lastly, it would help if you articulated how much profit it is reasonable for firms to make and quantify how much of the profit currently enjoyed by firms you think should be transferred to clients (without risking collapse of said firms).

    The above may help inform you whether it’s worthwhile carrying out this exercise.

  6. If the FCA were to look at making it easier to move assets from platform A to platform B, assuming it was absolutely demonstrable that it would not materially disadvantage the client, then I believe it would engender greater competition between platforms to improve their end user (clients) outcomes. At present there is a massive dis-incentive from an advisers perspective to consider re-platforming (even if it is clearly better for the clients) due to the regulatory hassle to do so.

  7. Why does the FCA not concentrate on reducing mis-selling, getting Govt to leave Pensions alone for 10 years minimum, getting Govt to increase the ubiquitous age 75 inline with state pension, personal pension access and longevity dates. Concentrate on removing phoenix lief companies and consolidators ability to charge 34+% for Clients moving their pensions within a year of access.
    Oh no, of course not, that would be ‘proper’ work and really helpful to Clients and advisers.

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