Advisers increase platform due diligence: Survey

Almost two-thirds of surveyed advisers have said the Financial Conduct Authority’s platform paper has spurred them on to do more rigorous due diligence on platforms.

According to a survey of 557 advisers conducted by platform provider Skandia in May, 65 per cent of respondents said they will increase platform due diligence compared with 13 per cent who said the paper would not affect how much due diligence they do this year.

Just 43 per cent identified charges as the most important area to consider when conducting platform due diligence.

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Platform functionality came a distant second with only 16 per cent of advisers identifying it as their prime consideration.

Range of funds, range of asset classes, accessibility and additional tools were less important, identified by only 7, 4, 1 and 1 per cent of advisers respectively.

From April 2014, advisers will be required to satisfy themselves that a platform provider has met the requirements set out within the paper, and does not present its products with any bias.

Michael Barrett, platform marketing manager at Skandia, said: “There is now an increased onus on advisers to assess platform capabilities as a result of the recent platform paper.

“Despite the requirements of [the paper] PS13/1 not coming into play until next year, it is already clear that advisers are including this now in any due diligence assessments being made, in addition to the nine factors the FCA already require to be considered.”