When the FCA platform paper, PS13/1, was published about a year ago, it was hailed as something that would herald a new era of transparency in the platform world.
The idea was that clean share classes and the ‘ban’ on rebates from fund managers to platforms would deliver transparency, clarity and simplicity for clients. But it’s now becoming clear that such a goal is but a gigantic illusion.
The reality is a number of platforms continue to get paid by fund rebate for the so-called ‘allowable activities’, such as advertising and corporate actions.
While there’s no foul play here, the question is: why does a platform insist on getting paid for services it provides to fund managers via the fund?
And why are these payments shown in the illustrations provided to clients, with little explanation as to what they are for? Furthermore, what happens to the old-fashioned practice of issuing invoices and getting fund managers to pay platforms directly for the services they provide – rather than through the fund?
My take is that some platforms are content to do the bare minimum allowed by the regulator. And God forbid someone actually thinking about the clients, who must be disillusioned by the smoke and mirrors in platformland.
Abraham Okusanya is founder and director at FinalytiQ
