In its response to the FSA’s platform discussion paper, Skandia says the current disclosure regime, with a focus on the charges at the point of sale, does not cover the entire range of charges that affect the outcome to the consumer.
It also says firms should not be permitted to refer to annual management charges without reference to the higher total expense ratio amount.
Skandia says with advisers increasingly looking to build client specific investment portfolios and change those over time in line with the client’s changing requirements, switch charges are becoming increasingly common and must be factored into product disclosure.
Skandia head of marketing Billy Mackay says: “The dramatic increase in platform usage is a result of the benefits they deliver to advisers and their clients. The FSA’s discussion paper is an excellent opportunity for the industry to agree best practices, air concerns and ultimately ensure that we have a regulatory framework, which ensures the growth of platforms can be taken forward in the best interests of consumers.
“Key to this is to ensure that disclosure practices are consistent between platforms and packaged products whilst at the same time improving on the current disclosure regime. This will enable advisers and their clients to make fully informed decisions on the products and services appropriate to their needs.”