Last week’s article by Kira Nickerson, headlined Platform price war, was a compelling read which raised many valid points about future distribution trends and pricing in the platform industry.
It also raised many questions. For me, one major concern emerges above all, namely, when presented with guided architecture, model portfolios or “solutions”, how will the adviser gauge the part that commercial considerations have played in the inclusion or exclusion of funds?
While the majority of platforms have embraced open architecture, we have recently seen some of them seemingly start to do an about-turn. I am not saying there is anything wrong with guided architecture per se. We strongly believe in open architecture but we also believe that in an industry with thousands of funds and wrappers to choose from, choice in itself can become an issue. Therefore, there is definitely a place for guided architecture.
Where we do take issue is when the reasons for a fund’s inclusion or exclusion may be concealed. How can an adviser using a platform be sure on behalf of their client that the investment choices were made only on investment criteria if the platform’s pricing agreements differ from one fund provider to another? It creates an obvious conflict and leaves the adviser in the dark.
At Fidelity FundsNetwork, we firmly believe in putting the adviser in a position where he or she can be sure of making a decision in the client’s best interest.
We approach relation-ships with fund providers in the same way. It is a simple and transparent approach in the spirit of RDR and ensures a level playing field for all providers on our platform. Our strong belief is that advisers prefer this approach.
Head of UK retail sales, Fidelity International