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FSA: Advisers are not properly considering price

The FSA says some advisers do not take platform pricing and pricing changes into account sufficiently when assessing the market.

Speaking at The Platforum annual conference in London last week, FSA technical specialist Rory Percival reinforced the FSA’s stance on the importance of assessing price.

Percival said: “There are some advisers out there who do not pay enough attention to the price of the platform. I also think the FSA is wary of advisers whose clients are paying to use a platform with lots of bells and whistles but these tools are not suitable for the client.

“In that case they could be paying too much for a platform because they are not using the services provided and they are included in the price.”

Also at the conference, Ascentric managing director Hugo Thorman said pricing will not fall as far as some have suggested.

Thorman said: “If the average price at the moment is around 35bps, that could come down to around 25bps but it is unlikely to reduce any further.”

Transact managing director Ian Taylor said: “The price of a platform is not straightforward, it depends on what you do, how much you trade and a variety of other factors. I do not think you can look at a top level figure and say accurately that is what the platform will cost.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Does no one at the FSA have any common sense.

    “Never mind the quality of the advice, never mind the performance of funds under management, just concentrate on obtaining the lowest possible AMC and charges.”

    It surely cannot be right that we consider the price before the quality and the performance of the assets on the platform.?

    Loonies running the asylum again!

  2. Ned, platforms are often the smallest element of the ‘single solution cost’. As this varies from avg 2.5-3.2% this can make a huge diff to the £ value of your adviser charges if based on % of FUM, as well as clients returns. We’ve helped adviser increase the £ val of ACs by 20% just by getting this mix right. Easily £250-500k for an avg adviser’s client bank of 20+yrs

    FSA single solution costs inc platform, tax wrapper, fund, rebalancing, DFM, Adviser Charging fees as a single RIY for the solution.

    Drop me a line if you want to run a case study.

    Will

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