The regulator’s stance on transparency, platforms, drawdown, complex products and fair fees
1: The transparency test ahead
“Relatively few advisers are transparent about their pricing before they sell advice” the regulator ruled in its view on the retail investment sector, throwing down the gauntlet to advisers to be clearer on charges. It adds: “This does not incentivise advisers to compete on price and may result in limited pressure on them to reduce their charges.”
2: Platform pressure
The regulator will be investigating competition between platforms to see if they “enable retail investors to access investment products that offer value for money.” The FCA says: “We will conduct a market study to explore how direct-to-consumer and intermediated investment platforms compete to win new and retain existing customers. The study will explore whether platforms enable retail investors to access investment products that offer value for money. When scoping the study, we will take into account relevant feedback we receive on the asset management market study.”
3: Drawdown deep-dive
A thematic review of non-advised drawdown has been set in motion, meaning the FCA will likely be conducting site visits and investigations on providers’ sales processes.
4: Complex products under scrutiny
“We will carry out further work to target those firms providing unsuitable advice about complex products,” the FCA says in a warning shot over high-risk recommendations.
5: Fighting for fair fees
The FCA’s budget came in at £526.9m. Adviser contributions will be £77.1m, up 4.7 per cent on last year, but fees for the Money Advice Service have gone down and most fee groups can expect increases only in line with inflation.