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.”