View more on these topics

Platforum sees danger of being single minded

Platforum has warned advisers to be wary of adopting a single platform due to significant variations in wrapper and fund charges between providers.

Speaking at The Platforum conference in London last week, managing director Holly Mac-kay said she had revised her views on the merits of using a single platform following her work with Capita on its platform pricing tool.

She cited one example of a client who had the same mut-ual funds, listed securities and tax wrappers with two differ- ent platform providers, where the charges varied considerably.

Using the platform pricing tool, one platform had a reduction in yield of 2.21 per cent while the other returned a reduction in yield of 2.59 per cent.

Mackay says: “When you look at what this means in terms of pounds to the customer over a 15-year investment period, there was a £40,000 difference between platforms, which is pretty significant.

“The impact on adviser commission was £2,000 over the period. Having seen in depth the impact of different tax wra-pper charges and different switching costs, I do think that we have to be careful about the use of one platform in a business.”

FSA conduct and risk division supervisor Rory Percival said: “We feel that if an IFA firm has a fairly broad range of clients, then it is unlikely it is going to be able to use one platform for all their customers.”

But Macquarie head of distribution John Porteous, who also spoke at the conference, called for more clarity from the FSA.

He said: “The single wrap issue is clearly such a big one for so many practices. As the FSA is looking at platforms as a regulatory priority, it would be helpful to have more clarity rather than this terminology of a homogenous client bank. The definition as it stands is just not clear enough to a number of practitioners.”


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm