Add-on charges for platform statements questioned

Consumer demand for digital has meant many investment platforms have left paper communications behind, with those still wanting paper statements often paying for the privilege.

Most platform providers have moved all but annual or half-yearly statements online, citing lack of demand.

However, the Financial Conduct Authority’s risk outlook for 2014 pointed out that where a firm’s strategy for product services and distribution is primarily driven through digital platforms, consumers who are not technologically savvy may be forced to engage with services which they are unable to use properly.

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In fact, the FCA states that platforms must provide at least one annual statement a year in paper format, which has prompted some platforms to question the charges applied by peers.

Hugo Thorman, managing director at Ascentric, said that the platform did not charge for the two hard copies it sends each year, with the cost being bundled up with other overheads of running a platform account.

“I’m surprised anyone charges for this. We are required by the FCA to send at least one a year so I can’t see how you can charge, unless of course there is an online service to which all clients have access; then I suppose it’s more understandable.

“If the client accepts the terms and they have online access and can print off a statement, then I suppose you can charge for a paper version; if you don’t like that, move platform.”

David Tiller, head of adviser platforms at Standard Life, responded that as there is a requirement to provide statements it does not believe there should ever be a charge for them.

“In our experience clients and advisers would prefer to statements to be made available online only. We are currently in the process of rolling out a ‘paperless’ option that allows statements to be stored online for advisers and their clients to access at their leisure.”

An Alliance Trust Savings spokesperson told FTAdviser that the firm charges clients £5 plus VAT for paper statements and valuations which are issued in April and October, covering all of the accounts they hold.

Prior to introducing this charge the firm encouraged all clients to change their preferences to receive their statements online free of charge.

“We regularly remind client of this option which would save them money and reduce the volume of paper we produce as a business,” the firm stated.

“This fee does also cover sending paper contract notes and other documents that can be issued by paper such as pension statements.

“We believe a separate charge for paper statements and valuations is fairer and more transparent than simply increasing the product wrapper charge as this would discriminate against clients who are receiving their statement and valuation online.”

Hargreaves Lansdown charge investors £10 plus VAT per paper statement to cover the cost of administration, printing and posting.

Danny Cox, the firm’s head of financial planning, said that it will issue paper statements free under exceptional circumstances, for example if a client has genuine reasons why they cannot access or use online statements.