Platforms still need to improve ‘re-reg’ and avoid over-charging inactive, non-advised clients, finds FCA Thematic Review of platform providers
8 March 2014
The FCA’s Thematic Review of Platforms finding, which were unveiled this week, reveal that the market is broadly on course for meeting
PS13/1 rules on transparent charging within the next month for new business and in two-year’s time, on 6 April 2016, for legacy business. The findings were made public this week by Nick Poyntz-Wright, the FCA’s head of long term savings.
As an exercise in clear ‘customer communications’ it got ten out of ten. The core findings were laid out in a six minute video given by the man himself and supported by a PowerPoint-style presentation; and the overview was very positive:
Areas of criticisms were:
So if platform providers are cruising over the first key compliance fence next month, will they fare as well over the next two years as they set about the gargantuan task of moving much larger amounts of legacy business into shiny new clean asset-classed funds?
Certainly we had some early warning of the scale of this job from the likes of Ascentric’s Hugo Thorman and Nucleus’ David Ferguson commented back last May on their worries that, if automated systems for bulk transfers of assets to clean asset classed funds were not found, the legacy migration process could be beyond their resources. Fortunately there have been developments in these areas and rock solid outsourced services exist for migrating these legacy assets through to new ‘cleaned’ funds have been rolled out and are in wide use by platforms now.
So on paper it all looks like plain sailing for platforms to be fully PS13/1 compliant, in line with the spirit of low-charging transparency fostered by RDR. But will the growing pressure on margins and relentless drive for efficiency also lead naturally to a wave of consolidations anytime soon? And if this happens will the platform market’s current healthy level of competition be threatened?
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