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MMTV: FCA says platforms have further to go on rebate ban

The FCA has published a video detailing the findings of its review into how firms are preparing for new platform rules which come into force next month.

Under FCA rules, from April platforms operating a bundled charging structure for existing business will have to switch to an unbundled platform fee where there is a ‘disturbance event’, such as a fund top-up or change to the product. Cash rebates and fund manager payments to platforms are banned on new business.

The FCA will apply a two-year sunset clause from April on a ban on all legacy payments between fund managers and platforms. 

The regulator says platforms are well prepared overall for the introduction of the rules on 6 April.

But it has highlighted a number of areas of potential concern which it suggests firms need to focus on.

The FCA says firms should ensure previously-advised consumers who find themselves without an adviser as a result of the rules are able to access their investments and are not disadvantaged compared to other customers.

The regulator also says it would like to see further progress on consumer communications and re-registration. It says firms must be able to transfer a consumer from one platform to another in a reasonable timescale, and that exit charges should not be a barrier to moving platform.

The FCA also says it did not see as much focus on contingency planning as it expected, and that firms should give consideration to scenarios such as technology not working and consumers not responding as expected.

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