FSA calls for wrap providers to disclose income details

The Financial Services Authority has written to all platform providers asking them to disclose where they make their money, and which incentives they offer advisers who use their service.

The letter, sent by FSA senior associate for investment policy Steve Tully earlier this month, says platform and wrap providers must reveal details of the total income they receive in rebates and interest from fund managers.

They must also provide confirmation of the revenue received for each type of income in their last accounting year and indicate any anticipated changes to the mix of its income.

Terms and conditions each platform has with product providers must also be revealed, alongside details of any revenue sharing arrangements and service related variations in income.

Tully is also asking platform providers to disclose details of any monetary and non-monetary benefits it provides to adviser firms, including any conditions which restrict the supply of the benefit to adviser firms and how much of the cost of a non-monetary benefit it recoups from adviser firms.

The letter says: “Our proposals for adviser charging have caused some members of the industry to question the acceptability of platforms and others continuing to receive commission set by product providers. This also prompts wider questions about the best way to achieve transparency of incentives and charges on platforms in the longer term.

“Consequently, we now wish to gather information about platform operators’ income. We also wish to gather up-to-date information about the monetary and non-monetary benefits provided by platforms to adviser firms.”

Providers must respond by Friday.

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