View more on these topics

FSA concerned over complexity and cost of platforms

The FSA has published feedback to its discussion paper on platforms which highlights concerns it has over the complexity and cost to consumers of using platforms.

The regulator says it will be investigating advisers that use platforms and platform providers to ensure customers are being treated fairly.

The DP was published in June 2007 and in the feedback statement the FSA says that principles-based regulation is the right approach for platforms because more stringent rules could stifle innovation.

But the FSA remains concerned that platform adoption may lead to increased complexity and costs for consumers without new – or valued – services being received in return.

It also says that platforms could create conflicts of interest for advisers and there is a risk that advisers may not always have the appropriate competence to provide the level of investment advice they are offering through a platform.

The FSA says it will be looking at platform providers and advisers that use platforms to ensure that customers are being treated fairly through the existing regulatory approach.

FSA Director of Retail Policy and Themes Dan Waters says: “We are grateful to all those who responded to our Discussion Paper, and are pleased with the level and quality of responses we received. We believe that our principles-based approach to platforms, favoured by the industry, is appropriate – this gives firms discretion over how they approach platforms, and in a way that treats customers fairly, in line with their own business models.

“However, we are anxious that firms place customers at the heart of their operations when using platforms, and we are planning follow-up work with platform providers and intermediaries to ensure that this is the case.”

“In the second quarter of 2008, the FSA will begin thematic work on intermediaries’ use of platforms to assess current market practice and the extent to which firms are treating customers fairly. The FSA will also shortly be contacting platform providers to examine in more detail and seek to clarify and improve standards of costs and services disclosure across the industry.”

Recommended

Bush and Brown to set up regulatory working group

Gordon Brown and George Bush are to set up a UK-US working group which will develop proposals to monitor and regulate banks with cross-border interests according to the Financial Times.The move comes after Chancellor Alistair Darling and his US equivalent Hank Paulson agreed plans to form a body of senior Treasury and regulatory figures from […]

Pension sales strength underpins Winterthur

Winterthur saw a 22 per cent rise in individual pension new business last year from £1.6bn to £1.9bn.The company says the increase this is predominantly due to the success of its single- premium proposition.Assets under management rose from £10.4bn in quarter four 2006 to £11.4bn at the end of December 2007.Single-premium personal pensions business increased […]

Interbank rates aggravated by Northern Rock cash flow, says Ward

New Star economist Simon Ward says the upward pressure on interbank interest rates has been aggravated by a flow of cash back to Northern Rock.He says: “Other banks benefited from Northern Rock’s woes last autumn, as savers withdrew funds from the troubled lender and redeposited them elsewhere. Now, the reverse flow is occurring, with savers […]

Co-op offers extra commission on core funds

The Co-operative Investments is offering advisers an extra 1 per cent commission on investments made via Cofunds or FundsNetwork.The offer is valid on the The Co-operative Investment’s core UK fund range until the end of 30 April. The range includes Mike Fox’s Sustainable Leaders Trust, Andrew Moffat’s UK Income with Growth Trust and the UK […]

The Merchants Trust PLC – April 2017

Welcome to the latest update for The Merchants Trust PLC from the Trust’s portfolio manager, Simon Gergel. Portfolio Review The Merchants Trust reported results this month and the directors were pleased to announce a 35th consecutive year of dividend growth (subject to shareholder approval at the AGM). The Company is proud to be highlighted as […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment