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Platforms left in limbo over bulk switches

Platforms have been left in limbo by the FCA as they await final guidance on carrying out bulk conversions to clean share classes, according to Aviva.

The regulator published a consultation in October which stated platforms must consider client’s best interests where a bulk conversion to clean share classes takes place.

The FCA has yet to issue final guidance on bulk conversions, though Standard Life and Alliance Trust Savings have already completed their conversions.

But Aviva says it is not clear how platforms should judge whether converting to clean classes creates client detriment.

Aviva head of platform proposition Phil Ralli says: “Platforms are working hard to implement new regulations but we need help from the FCA. Clarity in key aspects of share class conversion, such as how client detriment should be calculated, is vital.

“Some platforms have already gone ahead with conversions, and any remedial work when the FCA publishes guidance could come at substantial cost and cause market disruption.”

An FCA spokesman says: “Despite much of the feedback coming after the deadline we felt it important to consider all the responses we received. We are now working through those and deciding on the final guidance on moving customers onto post-RDR unit classes.”

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