Transact chief executive Ian Taylor claims that platforms are misleading IFAs in a bid to win market share before the retail distribution review changes are implemented.
In a Transact adviser update, Taylor says platform providers are manipulating IFAs and “making hay while the pre-RDR sun shines”. He says tactics include misleading the market by spreading rumours about FSA thinking and propagating myths about competitors.
He said: “One of the main challenges the RDR will present to product providers is that it will require them to use their brains rather than their wallets to win market share.
“Marketing departments and product designers are going to have to start earning their living by coming up with products and services that are recommended solely because they are better than others.
“This is not a particularly palatable outlook for many product providers so we get the impression they have recently decided they had better make as much hay as possible while the pre- RDR sun still shines.”
Threesixty partner Phil Young says: “Any talk about RDR by platforms in definitive terms at this stage would seem premature and speculative, with the FSA paper just a few weeks away. All we definitely know is that we do not know anything definitively.”
On charging comparisons, Young adds that it is crucial platforms make clear any discounts for volumes of assets.
He says: “Volume discounts on charges are a fundamental part of any price comparison and a failure to include these would most probably be to the advantage of the bundled platforms and the disadvantage of explicit- priced platforms such as Transact. Non-inclusion of these, where relevant, would be misleading but it is the responsibility of the advisory firm to be diligent in their research.”
Taylor says that other tactics being used to manipulate the market include the recasting of assets under management to create impressive sales histories, creating highly selective comparison sales aids and the use of “absurd” growth rates in pension illustrations.
In a separate statement to investors, Transact says it is preparing itself for a marketing push in a bid to recruit more IFAs.
Taylor and Transact chairman Mike Howard say recruiting new IFAs to the wrap is more difficult now than two years ago, with the number of new advisers joining the platform falling 40 per cent last year, and, as a result, the wrap is now planning a more “organised, proactive marketing approach” for 2010.