View more on these topics

FSA challenges advisers’ platform charging strategy

The Financial Services Authority head of retail investment policy Rory Percival has challenged advisers for the way wrap charges are passed on to the consumer.

Attending yesterday’s Platform Evolution conference in London, Percival asked the panel of advisers why they charge customers direct when using platforms, and why net cost sometimes appear higher when using a platform.

He said: “Given that the bulk of what platforms do is to drive efficiencies and support services that advisers provide the customers, why is it that cost of wraps are charged directly to the customer rather then being an overhead to the advisory firm?

“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 customer.

He said: “On the platform all charges are explicitly charged to the clients account directly. They are not sneaked in anywhere, or piggybacked under AMC. It might not be the ideal solution but nonetheless, they are all there, completely transparent and visible.”

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 and apply your values, judgments and otherwise rather than a service one.

“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.”



Aifa slams IFA Promotion

Aifa director general Chris Cummings has hit out at IFA Promotion over the way it communicates with other trade bodies and the lack of an IFA response to the Natwest advice adverts.

Newton rethinks AMC in bid to bolster distribution

Newton has changed the way it deducts the annual management charge for its £911m income fund to bolster income distribution for shareholders.From midnight on July 31, the group is to deduct the AMC from the capital of the fund rather than the income generated. The AMC will remain at 1.5 per cent.Newton income has had […]

Health services

Challenges and opportunities

By Sarah Scott, marketing consultant On 22 February this year the charity Diabetes UK launched a fundraising initiative, #Swim22. They challenged individuals to swim 22 miles over the course of 89 days – a distance that equates to the width of the English Channel. Because of the time period the challenge is spread over, it […]


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 4th June 2009 at 2:05 pm

    FSA challenges advisers’ platform charging strategy
    For heaven’s sake ~ doesn’t the FSA have anything better to do than look for yet more opportunities to criticise the IFA sector? Well, yes, of course it does ~ like regulating the banks for a start, followed very closely by reforming radically its own expenditures, not least on salaries and bonuses and its lavish expense accounts. Then, of course, it could turn its attention next to all these extravagant outside consultancy exercises that prove nothing that most of us don’t already know full well or merely arrive at conclusions which are completely unproveable or irrelevant.

  2. Bring it on!
    Adviser provides and therefore pays for the wrap (often a white label arrangement with a third party wrap administrator) is a valid and popular commercial model in Australia but the main reason this doesn’t work in the UK is the FSA regulatory regime!
    If the adviser could provide and charge for the tax wrapper and not rely on a provider, I’m sure that many adviser firms would embrace that business model and the enhanced business valuation that goes with it. It should also be said that even if advisers provided and charged for the wrap, the total cost to the client would still be much the same since there would be no cost savings, just a change in the division of labour in the supply chain to the client.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm