AJ Bell has called on the FCA to provide clarity on the suitability process advisers should follow when transferring clients in bulk to another platform.
Speaking to Money Marketing, chief executive Andy Bell says many advisers are reviewing the platforms they use as a result of the major replatforming exercises under way across the platform market. But he says advisers seem unsure about the FCA’s suitability requirements when moving platform clients in bulk.
He says: “When we speak to advisers, they are interpreting this as having to go through a full advice process, and tend to link it to an annual review. Transfers are probably happening at an individual level, but advisers feel like transferring clients in bulk is too big a job and they are uncomfortable with the compliance risk. There are perceived obstacles and blockages in the way that don’t need to be there.”
Bell has recently met with the FCA to discuss the issue, and is hoping to work with the regulator on producing further guidance.
He adds: “What we’ve called the FCA to do is give some reassurance that if advisers are moving platforms to achieve better value and where there is no substantive change to the customer’s tax wrappers and underlying investments, a simplified suitability process can be followed.
“The FCA’s focus is all about consumer outcomes. I have made the point that stopping someone from moving to a cheaper platform that offers the same or better service is surely not a good consumer outcome.
“This is less a call for a change to the rules, and more about guidance and clarification from the FCA so that advisers can push ahead with transfers as a block piece of work. What we would like to see from the FCA is guidance on what is and isn’t acceptable.”
The FCA declined to comment.
Pilot Financial Planning director Ian Thomas says: “Guidance on the process for moving platform clients would be helpful, and is a sensible idea. But there is a bigger issue here. Networks and support services can often require a full suitability report for any portfolio rebalance or fund switch.
“It comes down to running an ongoing service-based model, rather than a product-led one. We don’t want to have to write war and peace for every minor bit of new advice. It’s all about guidance on appropriate suitability overall, and for me this goes wider than platform switching.”