Platforms are concerned that client information the FCA is proposing to collect as part of its market study could leave them open to data protection risks.
Last month, Money Marketing reported the FCA had written to a number of platforms asking for feedback on the data it is looking to collect as part of its market study.
The regulator asked for responses on whether the platforms could supply the data it is considering collecting, as well as feedback on how the questions should be framed. The correspondence was not a formal data request.
Money Marketing understands the questionnaire is around 80 questions long and includes requests for detailed customer information.
The regulator is asking platforms if they could provide customers’ names, addresses, ages, whether the customer is advised or non-advised, how often they have transacted, the value of the customer’s funds on the platform, and how much they have been charged over certain time periods.
The initial correspondence sent to platforms asked if it was possible to provide that data for every client on the platform.
Several platforms tell Money Marketing they have concerns that the client data the regulator is considering collecting could pose data protection risks.
A senior platform market source says: “Because the name and address would be there alongside all this extensive financial information, if we did provide this information we would need to go through extensive data protection checks.
“You don’t need to ask the client’s permission [to supply the data], but we would be very concerned if it got into the wrong hands.”
It is understood the FCA wants to survey platform customers as part of the market study as well as the providers themselves.
The initial questionnaire sent to platforms for feedback also asks for platforms to provide information on fees, performance, revenue, customer communications, promotional activities, and the commercial arrangements they have in place.
It is understood the regulator is also asking about whether platforms vary their service proposition for the different adviser firms they deal with.
Platforms pile on the pressure
The deadline for responses to the market study terms of reference was last week and platforms have used the opportunity to tell the regulator where they think the focus should be.
Aegon public affairs director Steven Cameron says a lot of what the FCA would look for in a competitive market already exists in the platform space.
He says: “We think it is important the market study focuses not just on improvements but highlights the benefits platforms are delivering.”
Aegon also wants the regulator to take into account the other work it has been doing that crosses over with the platform market study, for example, the Financial Advice Market Review, its asset management market study and the forthcoming review of the RDR.
Cameron says: “We are keen that the FCA joins up between the different market studies and reviews. In particular, we would like the FCA to allow the remedies from the asset management market study to bed in before they consider if they need to suggest further remedies in the platform space.”
The FCA will also look at vertical integration and the commercial relationships between platforms, asset managers, discretionary fund managers and advisers, which the FCA says could “distort competition”.
Standard Life adviser and wealth manager propositions head David Tiller says: “We were keen to point out that the key to looking at vertical integration is to look at the motivation for the packaging of components together and the degree of choice that customers or advisers have in terms of that packaging.”
He adds: “The other one is motivation. If a customer benefits in some way by a package deemed vertically integrated that is probably a good motivation. If it is the provider who has benefited, then that is more of a warning sign.
“We were keen to say to the regulator that the onus should be on vertically integrated models to demonstrate the customer benefit of restricting the choice available.”