The FCA should give advisers a detailed breakdown of all its costs and charges, instead of just issuing decrees, Matt Johnson, partner of Prosynergy Wealth and Tax Management has said.
The Staffordshire-based adviser said: “If telling us what we need to do in detail to be RDR-compliant is reasonable and fair in the FCA’s eyes, maybe it would be equally fair to give us a detailed breakdown exacting what all of its own costs and charges are for, so that we can be as equally enlightened as the regulator expects our clients to be.”
His comment came as several financial advisers commented on news that the FCA had produced a series of factsheets outlining the measures that advisers must comply with when it comes to using platforms and outsourcing investment decisions.
In the factsheets, which were published earlier this month, the FCA said that advisers must review the platform they use to ensure it is the most appropriate one for their business and clients.
One factsheet, called 011: Using platform-based investments and the independence rule, stated that an adviser must not claim to be independent “unless they can offer personal recommendation on the packaged product from the whole market or a whole section of the market”.
In response, Alan Parkinson, a Liverpool-based financial adviser, said that the main benefit of independent advice comes in the selection of the holdings on the platform, not the platform selection.
However, Greg Thomson, an Essex-based financial adviser, disagreed with Mr Parkinson, saying: “So would a restricted adviser with two platforms but with a full offering from those platforms be as independent as you? Or are you as restricted as them? Surely someone can only be one or the other.”
Shailain Shah, managing director of Hertfordshire-based Libra Insurance Services, said that platforms have provided a “great service” with the ability to chose multiple fund managers under one roof.
He said: “Buying from a platform is often cheaper than buying direct from a fund manager.”
However, Mr Shah agreed that the FCA should produce benchmark standards to make it easier for advisers, adding: “The FCA could have a star rating for each platform in terms of value for money to the consumer and funds available.”
An FCA spokesman said: “We do give a breakdown of all our costs and expenditure. It is in our business plan.”
