Platforms must be doing something right to get their very own FCA market study. Impressive asset levels, growth rates and customer numbers over the last decade have caught the regulator’s eye. Further, asset managers have drawn the FCA’s attention to the parts of the value chain that last year’s Asset Management Market Study didn’t reach.
Download the unabridged Platforum view on all the key issues identified in the study here.
The FCA doesn’t look as if it will punish the platform sector with this initiative and some of the proposals will be watered down through the feedback phase prior to the final report in Q1 2019. In particular, a full-blown ban on exit fees seems unlikely given that there are legitimate costs borne by platforms when people jump ship.
The FCA points out that good work has been done: “platforms are popular with investors, and competition is working well in some areas.”
It goes on to say that platforms must try harder in certain areas that are largely well identified.
- Making shopping around easier
- Driving competition among asset managers
- Doing a better job with cash
- Improving switching
- Giving orphan clients a fair deal
- Matching risk for investment solutions chosen by DIY investors
- Compliance with the FCA’s rules
The FCA has put its finger on some known issues in both the D2C market, which this study is skewed towards, and the adviser platform market. Remedying them won’t necessarily run against the interests of platforms but it will be challenging. We think that the regulator may look to encourage the market to make amends in most instances, rather than the interventionist approach.
Follow this link to download the unabridged Platforum view on all the key issues identified in the study. We look at the seven areas that have been earmarked for further consideration and give our view on what might happen next.