Industry experts have reacted positively to the FCA’s long-awaited platform market study this morning and news that it is considering an exit fee ban and more guidance over how advisers should charge for platform recomendations.
Commentators on the study are wary that the regulator still has a way to go to ensure clarity for advisers, however.
Verona Smith, head of intermediary, 7IM
The industry needs to remember that it is a privilege, not a right to look after client money. This report puts the consumer at its core, centering around doing the right thing, making switching easier and comparisons simpler. The platform industry has moved forward over the years, but we are still not there yet and it’s time these barriers were removed.
Steven Cameron, pensions director, Aegon
It’s important that individual customers, whether or not advised, don’t face undue barriers if wishing to switch between platforms. While the report continues to look at how platforms can exert competition pressure on asset managers, it fails to recognise that “open” platforms have less negotiating power with fund managers than those which limit the funds on offer.
Andrew Glessing, head of regulation, Alpha FMC
As with the asset management market study, competition must align with conduct. The regulator wants to see greater visibility of competition among asset managers, flowing through large and small platforms alike, and will continue to challenge any platform practices where it feels services better benefit the intermediary than the end consumer.
Richard Clarke, partner and wealth management lead, KPMG UK
There are a lot of rules and guidelines in place already on costs and charges, but the regulator has made it clear they won’t shy away from introducing more if the industry is seen to be falling short. The proposed measures successfully link the whole value chain by putting an obligation on both the platforms and firms to assess and disclose value for money.
Martin Stead, chief executive, Nutmeg
At the moment, it’s too difficult to compare the costs you face from different providers – particularly if you want an idea of what you could be paying over the life of your investment. We’ve been disappointed at how the investment industry has adopted the relevant Mifid II rules so far, with some providers not going as far as they should to make costs and charges clear and easy for investors to understand.
Richard Wilson, chief executive, Interactive Investor
One of the biggest issues is in the industry is lack of transparency in pricing and the ability of investors to switch between providers is an essential part of a fair and competitive industry. There is a risk of significant detriment to customers arising where firms offer tempting incentives for customers to switch, but then tie customers in unfairly with exit fees or minimum holding periods.
Kevin Russell, proposition director, SEI Wealth
Solutions need to deliver positive outcomes for consumers and advisers, and the report also makes it clear that those businesses which do not take technology seriously by making the necessary ongoing investments risk causing customers detriment. Whatever the regulator can do to facilitate an environment where innovation is encouraged to tackle recognised issues should be welcomed.