The FSA has produced cost estimates for its proposals to disclose payments to platforms from fund managers without a concrete proposal on how firms will disclose this information.
In its consultation paper on the platform market published last week, the FSA proposes to keep rebates between fund managers and platforms, subject to “improved disclosure.” The FSA will consult with the industry over the best way to meet this requirement.
A cost-benefit analysis of these proposals is included in the paper, even though it is not yet known how these rules will work in practice.
The FSA estimates that platform operators will face £21.7m in one-off costs to set up the necessary IT systems and £3.4m in ongoing costs to regularly notify clients about the payments.
Fund companies are expected to face one-off costs of £2.9m due to the cost of renegotiating contracts and no ongoing costs.
Members of the UK Platform Group, which includes Fidelity FundsNetwork, Skandia and Cofunds, have previously floated the idea of a common disclosure document which breaks down total customer cost into individual charges.
Fidelity Investment Managers head of UK fund partners Ed Dymott says: “We believe that an industrywide disclosure document is the best way forward. The UK Platform Group has already started work on this and is engaging with the FSA over what this will look like.”