IFAs only migrating new clients onto platforms rather than moving all customers could be in breach of the FSA’s treating customers fairly requirement, warns Dunstan Thomas.
In its wrap trends survey, the technology provider found that 25 per cent of advisers are only migrating new clients onto platforms this year rather then their entire client base.
While 52 per cent say they were reviewing a select group of clients to assess whether to move them onto wrap, only 19 per cent were revisiting their whole client base.
Dunstan Thomas chairman Chris Read says this could present regulatory problems for IFAs who are only migrating new business. He says: “Our survey indicates 71 per cent of IFAs may be in breach of treating customers fairly by selecting specific groups of customers to migrate to wrap rather than explaining the pros and cons of wrap to all customers.
“A recent comment made by the FSA suggested that if advisers do not offer wrap when it is considered to be suitable, that may call into question the suitability of their recommendation.”
Read says the FSA will expect IFAs to have a good reason for moving, or not moving, clients onto platforms.
Mackenzie Taylor Wealth Management director Ken Taylor says: “Wherever possible we seek to migrate everybody. It is for TCF as much as anything that we have a consistent method.”