FSA consults on changes to platforms market
by Gill Montia
Story link: FSA consults on changes to platforms market
The Financial Services Authority (FSA) is consulting on proposals that would help investors make fully informed choices should they wish to consolidate their investments on a platform and understand exactly what they are paying for the service.
Currently, providers of investment products generally pay to have their products included on a platform, with the cost passed on to the investor in the price of the product.
The proposed changes mean that both investors and advisers will be able to compare the costs of investing through different platforms and make an informed decision on value for money.
To make charges clear to investors, there will be a ban on all payments from product providers to platforms, regardless of whether an investor using a platform is receiving advice, or has made his or her own investment decisions.
The FSA’s director of conduct policy, Sheila Nicoll, comments: “Investors are increasingly using platforms as a convenient ‘one stop shop’ for their investments, but at the moment many investors have no idea what they are paying for this service, while some believe it is free.”
She adds: “Today we are proposing changes that give investors and their advisers more control and mean that they know exactly what they are paying for a platform’s service.”
The FSA plans to publish final rules on platforms before the end of the year with new measures coming into effect on 31st December 2013.
Separately, the regulator is seeking views on whether the ban on payments from product providers should be read across to the wider retail investment market, such as to life companies and Self-Invested Personal Pension (SIPP) operators.