In a speech yesterday in Luxembourg, FSA director of conduct policy Sheila Nicoll sounded a warning shot to the platform industry to tackle re-registration issues, which she said were causing poor outcomes for consumers and presenting a potential barrier to new entrants.
She said that re-registration has been an issue in the UK for a number of years as many platforms do not allow customers to re-register holdings off their platform.
Nicoll said that where re-registration is not available, customers have to sell and repurchase holdings if they want to move them elsewhere which could cause a tax liability.
Nicoll said that as a result of some platforms not allowing re-registration, “customers and their advisers may find it more difficult, or even impractical, to transfer assets to another service provider”.
She said: “Some may even be put off by the hurdles without investigating the practicalities of a transfer.”
She added: “This is a poor outcome, as customers should be able to transfer their assets elsewhere if they are no longer satisfied with the service they receive.
“The lack of re-registration also presents a potential barrier to new entrants to the platform market and we will be discussing the options available to us to correct this poor outcome.”
Nicoll also said the FSA is looking at ways of ensuring that platforms do not become a channel which providers use to continue paying commission to advisers.
She also said the FSA does not want to see platforms offering incentives to move investments unnecessarily between platforms, especially if consumers incur extra charges.