Firms at the centre of the FCA’s platform market study are sitting tight for the regulator’s next moves, as discretionary businesses struggle to compile the requested information.
The FCA launched its platform market study in July last year, after the sweeping Asset Management Market Study called for further investigation.
In the market study terms of reference, the FCA said it would include a sample of firms to determine whether issues facing platforms also applied more broadly across the distribution landscape.
The terms of reference said the regulator would assess how much competition platforms faced from wealth managers, asset managers, discretionary fund managers and insurance firms.
Speaking to Money Marketing, one DFM boss says the request for information was very wide, understanding it was sent to most firms who have discretionary relationships.
The source says the data request included a question asking for time-weighted investment returns for each client over the past five years and that this, in particular, proved to be onerous for firms.
The source says: “We are hearing traditional wealth managers were really struggling to provide them with that data. They don’t have it. Platforms can though. It’s big data but they can provide it.”
However, even platforms found the data request – which reportedly ran to around 150 individual questions and asked for approximately 1,000 data points – a tough task to complete.
Money Marketing understands that extensions were considered on a case by case basis by the FCA, and that consumer research is still ongoing.
Money Marketing previously reported that some platforms had asked for an extension to the submission deadlines, with the first tranche of data due to be submitted to the FCA on 18 October and the last tranche due on 6 December.
It is understood the requested extensions also related to the timing of the data request coinciding with firms preparing for other regulation as well, including Mifid II, which came into force on 3 January.
It is understood the regulator has held meetings with each platform following the data submissions and now the businesses are awaiting the findings of an interim report, which is due in summer.
Aegon UK pensions director Steven Cameron says: “After an intense few months of responding to the investment platform market study’s very detailed information and data requests, things have gone very quiet. The FCA will undoubtedly need a few months to analyse responses, including amalgamating data to build a cross-industry picture while also recognising the different models across the market.”
Cameron wants to see the FCA look for ways to engage with platforms ahead of the interim report.
He says: “We may gain some insights through remedies arising from the Asset Management Market Study, which was what prompted the platform study. For example, placing a greater requirement on fund manager governing bodies to take responsibility and report on value for money across customer segments could be positive for platforms which aggregate customer funds but don’t explicitly direct investment flows, making it harder to negotiate discounts.”
Zurich retail platform strategy head Alistair Wilson says: “It was challenging to pull all the information, bearing in mind there are other things going on within the business. We did not miss a deadline and I would surprised if anybody did miss a deadline whether or not the FCA would be overly harsh with them.”
The regulator is also collecting information about clients as part of the market study and it scaled back the extent of information requested after platforms raised concerns about data protection.
Platforms no longer have to provide clients’ names and email addresses. However, the FCA still wants to know client ages, whether they are advised or not, how long they have been on the platform, which wrappers they use and the value of assets they hold.