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FCA testing platform readiness for rebate ban

The FCA says platforms could do more to communicate with customers ahead of the ban on rebates which comes into force in April.

FCA long-term savings and pensions director Nick Poyntz-Wright said the regulator is carrying out work to test platforms’ readiness for the new rules which ban payments between fund managers and platforms, with the results published in the next few months. Platforms have until April 2016 to transition their business models.

Poyntz-Wright said: “We are talking to some of the platform providers and operators to test what progress they are making in getting ready for the new rules in April.

“Good progress is being made, but one area people might want to give more consideration to is communication – explaining to their customers what the changes mean.

“The other aspect coming to the fore is contingency planning. Most firms have a pretty good plan but the question is, what if something goes wrong? That is where some of the challenges come from.”

A spokesman for the FCA says 10 platforms have been involved in the review.

Pilot Financial Planning director Ian Thomas says: “The way the RDR was implemented with regards to platforms caused a great deal of confusion by creating a multitude of share classes, so communication is definitely an issue.

“Some platforms will be better prepared than others depending on what legacy issues they have.”

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