View more on these topics

FCA: Product costs cannot subsidise wrap charges

FSA Skyview 480

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.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com