Trade bodies have welcomed the FCA’s decision to allow advisers to bundle clients’ platform investing costs into the charges they are taking for giving them advice, describing it as a “shift in the balance of power” in favour of advisers.
In the FCA’s rules on payments to platforms from fund managers, published last week, the regulator stated that advisory firms were allowed to pay platforms directly for services.
Gill Cardy (pictured), managing director of The IFA Centre, said this would allow advisers to spread the cost of a platform across their client base and reduce costs for certain clients.
“The idea that advisers can effectively give a contract to a platform is a good reminder that advisers are in a position themselves to create service propositions,” Ms Cardy said.
“That way they are not using a platform as a product to be paid for by consumers, but contracting a supplier to the business.
“This idea is one I know some advisers are considering. It is just like fund managers selecting stockbrokers. It’s a shift in the balance of power from platforms to advisers.”
Chris Hannant, policy director at the Association of Professional Financial Advisers, said the FCA’s move was “common sense”.
He added: “The regulator can get obsessed with transparency across the whole supply chain. The client wants to know what they are paying but what goes where is not of such interest. Whether it is broken down into platform payments and adviser charges makes little difference, so that flexibility seems sensible.”
The FCA said last week: “It was not the intention to prevent platforms being paid by intermediaries for any services they provide to an intermediary firm, and we have clarified this point in the rules.”
