The next major challenge for platforms will be implementing the sunset clause on payments relating to legacy business with fund managers, Altus consultant Ben Hammond has warned.
He said: “Although sometimes forgotten, the customer must be the central focus here. As with adviser charging, consent is required to set up new charging structures, and this needs to be obtained as soon as possible – certainly from 6 April 2016. That potentially creates some practical challenges for those who wish to keep their income flowing.”
Following the FCA ruling in April 2013, platforms had to ensure that all payments between fund managers and platforms ceased for new business from 6 April 2014. However, a further two years was given to phase out such payments for existing business – the so-called ‘sunset clause’.
Mr Hammond said it was essential that platforms worked closely with their advisers to sell the value of their service to customers and then transition them into clean share classes.
He said: “Some platforms have been running an explicit proposition for several years pre the retail distribution review, possibly in parallel with a bundled offering, and so could be fooled into thinking the task is easy.
“That could bcmistake. ‘Sunset’ may seem a long way off, but there is a lot to achieve in a very short space of time.”
Adviser View
Clayton Cumming, partner at Glasgow-based Advice and Wealth Management Solutions, said: “We deal with Aviva and Standard Life, and SL has automatically put us on clear share class. Throughout the year, depending on what platform our clients are using, we will do this as part of their annual review.
“So we have been very proactive, and within the next six months we will have everyone over. It is a laborious task, but platforms need to be proactive and aware of the clause.”
