As well as my usual postbag, I have been out and about chatting to people at our adviser roadshows in Bristol and London. It is clear that some IFAs are nervous about how they should document platform use within their businesses.
We all know why we use our platforms but hesitate when writing down how and why we made these selections. But according to FSA technical specialist Rory Percival: “It does not need to be War and Peace.”
Platforms are still new territory for some advisers. Getting qualified to QCF level four has been the priority for many firms during the past year and some are now just starting to think about formalising their use of platforms.
These advisers are exploring which one to use, how many they need, what the FSA expects and how long the process is going to take.
What do you need to do to tick the FSA box on platform due diligence?
First, the FSA does not want you to produce pages and pages of platform data in order to tick the box. It has been clear it wants to see evidence of a thought process.
It is also important to evidence a thorough review of the market at least annually. Fidelity recently announced its unbundled pricing structure. How does this reflect on your current platform provider and does this have any major impact to your clients and the service you provide?
Although cost is important, it is one of a number of elements to consider, as is user experience. Did the website break down? Are you getting value for money for your clients? What is the reporting like?
Most advisers have a handful of key requirements their platform must deliver to support their service proposition. Platform selection is about identifying your priorities and eliminating providers that do not deliver them.
I do not think the due diligence process needs to be a painful one – advisers tell me they do not want to be spending days completing lengthy documents and they already know the key things they need to support their businesses. Write these down and keep an eye on the players.
PAT is Platforum’s platform analysis tool. ’Dear PAT’ will share advisers’ most pressing concerns with platforms.