The FCA says platform clients must be made aware of possible cost increases resulting from being moved to clean shares.
The regulator has published final guidance this week on converting platform clients to clean share classes. Some platforms have moved to clean share classes already following the regulator’s rebates ban on new platform business.
In October the regulator issued a guidance consultation explaining it did not expect platforms to convert clients to clean share classes if there was client detriment. It prompted some questions from platforms about how they should assess client detriment, while others were frustrated at delays to publishing the final rules.
The regulator now acknowledges moving to clean may mean “some clients may be better off and some worse off.”
It says: “To mitigate the risk that some clients may be worse off, firms should ensure in all cases that clients have sufficient notification of and information on the proposed conversion to enable them to seek advice or make an informed decision on whether to transfer their investments to another platform.”
Money Marketing reported in November that costs for some clean share classes are more expensive than the bundled share class.