The FCA will launch its market study on platforms next month to assess the competition among providers.
The Investment Platforms Market Study will look at how adviser and direct-to-consumer investment platforms compete to win new clients and retain existing customers, and determine whether platforms allow investors access to products that offer value for money.
The regulator said in its final report on its Asset Management Study this morning that respondents had “confirmed our view that further work is warranted to assess the significance and scope of the issues raised”.
The FCA said: “The Investment Platforms Market Study will allow us to understand the causes of any competition problems in this market and assess what we can do to improve competition between platforms and improve consumer outcomes.
“The financial advice industry continues to be one of our priorities and we will continue to monitor and act on any risks to our objectives in this area.”
Grant Thornton UK partner and head of investment management David Morrey says he is not optimistic about how platforms will fare in the study.
Morrey says: “While that work remains to be performed, the focus is inevitably going to be on whether platforms provide cost efficiencies from which investors benefit. The Market Study leaves that as an open question, but implies that the answer is no.”
IG Group head of UK and Ireland Ian Peacock calls for the study to focus on standardised costs, the removal of transfer fees, a clampdown on hidden fees and “an examination of the various online comparison services on investment platforms and their true independence”.
“We welcome the upcoming market study into investment platforms. We believe that a low cost online service should not compromise at all on customer service, resulting in greater consumer control and clarity.”