The Financial Conduct Authority says platforms should not use cross-subsidies to market themselves as free or appear to offer lower platform pricing for investors in their own funds.
In its platform policy statement published last week, the FCA said the platform charge should not vary dramatically between products.
The FCA says: “The platform charge should essentially be similar across all products on a platform where there is not an appropriate reason for it to vary.
“So if a platform service provider is also a fund manager, we would not expect the platform to be labelled as free if the consumer invests in funds operated by that manager.”
The regulator is working to ensure consumers are clear about the cost of the platform service and says an example of good practice would include providing pricing information quarterly and half-yearly, setting out the exact charge in pounds and pence.
Platforms such as Axa Elevate have offered preferential platform rates if people invest in their range of Architas funds.
Axa Elevate managing director David Thompson says: “As a general principle, we still believe that clients should be able to benefit from a discount where they buy platform and investment form the same company.”
Yellowtail Financial Planning managing director Dennis Hall says: ”I would like to see Chinese walls between these operations to prevent firms from incentivising their own funds on their own platform.”