Another day, another FCA paper to review. This time we are talking about Investment Platforms. While the markets are working well for most, for some it’s not. This Market Study follows on from the Investment Platforms market study in 2017 which highlighted a number of issues. The FCA have proposed measures to overcome these problems.
The FCA is concerned about 5 main aspects of the market:
Just for the fun of it, today’s theme of sub headers is songs. Well known ones at that…
The Transfer and Re-registration Industry Group is currently taking forward an initiative to improve the switching process and reduce transfer times. At a minimum, this should provide:
The FCA say that the aggregated total charge disclosure imposed by MiFID II should help improve the situation. They are conducting a supervisory review to assess whether providers and distributors are providing the information required by MiFID II and PRIIPs. The FCA are not proposing additional costs and charges disclosure rules at this stage. Possible alternative options include requiring platforms to give intermediaries more data on platform charges and performance. They also include open data solutions where customers can export their usage history to third parties.
The FCA does recognise that the issues they have identified with in-house model portfolios might also apply to portfolios provide by wealth and asset managers and more to particular types of platforms. They have said they will do further work between their interim and final reports to assess the scope of these issues.
Depending on what the FCA find, they could then explore measures to help consumers make better choices between model portfolios. These could include, for example, the disclosure requirements that currently apply to funds to model portfolios or requiring firms to use standard terminology to describe their strategy and asset allocation.
The FCA will assess whether existing rules on disclosure go far enough or whether further rules or guidance is required to ensure the policy objective – to ensure consumers are making informed decisions – is achieved.
To improve outcomes for orphan clients the FCA are considering the following measures:
The FCA is welcoming feedback on:
If you have any comments then you can send them to firstname.lastname@example.org by the 21st of September 2018. The FCA aim to publish their final report in the first quarter of 2019 and we’ll be sure to do our best to once again translate it into a riveting read!