FSA head of retail investment policy Rory Percival has challenged advisers over the way that wrap charges are passed on to the consumer.
At last week’s Platform Evolution conference at the Hilton Kensington Hotel in London, Percival asked the panel of advisers why they charge clients direct when using platforms and why net costs some times appear higher when using a platform.
“The second part to my question is, given again that platforms provide efficiencies for advisers in processing client advice, why is it that in some cases the net cost to the customer becomes higher?”
But Argyle Financial Management director Phil Melville defended his decision to direct all charges to the client, saying: “They are not sneaked in anywhere or piggybacked under the annual management charge, they are all there, completely transparent and visible”.
Responding to Percival’s second point about customers potentially paying higher net costs when using a platform, Melville said: “You guys and the supervisory part of the industry still look at a service proposition through the eyes of a product sale.
“Service has to be valued by the recipient because they are the one who is going to decide whether or not they are going to continue paying for that service.”
Speaking at the conference, Macquarie head of financial planning John Baxter said: “The reality is that there are very few platforms in the market that can accommodate that and the ones that can are only interested in scale.”