Calls to fine failing platforms to deter others

Calls to fine failing platforms to deter others

The Financial Conduct Authority (FCA) must fine platforms whose clients have suffered issues as a result of replatforming to deter others, Abraham Okusanya of consultancy firm FinalytiQ, has said.

Mr Okusanya said the FCA was probably unable to force platforms to solve the litany of problems that have afflicted clients in any more timely a manner than has been the case.

But he thought many of the firms in question had been complacent about the task that faced them, and so should face a "commensurate" punishment.

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Advisers have been blighted by a litany of problems since Aviva and Aegon commenced their replatforming earlier this year.

Issues included processing adviser charges, switching funds, processing income drawdown, facilitating Isa contributions, and others, as has been extensively reported by FTAdviser.

In May some advisers were calling on the regulator to intervene after months of disruptions on the Aviva platform showed no signs of abating but the FCA would not comment on specific cases at the time.

Then in July it emerged the Royal London owned Ascentric platform also faced problems following a technology upgrade.

Mr Okusanya said: "Given the damage done to the reputations of firms such as Aegon and Aviva I think if they had a way of remedying the problems they would have done it by now, so I am not sure what powers the FCA have that would help with that."

He added: "Every firm that has done a replatforming said they would learn from the mistakes made by others, but every one of them has messed up. I think the FCA should fine firms and it would make others think twice about replatforming and making the same mistakes. When something goes as horribly wrong as this has, there must be a punishment."

Both Aviva and Aegon have confirmed they have been in regular contact with the FCA.

A representative of Aegon said: "Aegon treats regulatory compliance seriously and we have kept the FCA fully updated, both in the lead up to integration and afterwards."

Despite repeated requests the FCA declined to comment on the issues faced by platforms, or whether any regulatory rules, such as treating customers fairly, were in danger of being breached by the debacle.

Mr Okusanya said many clients had suffered emotionally as a result of the problems, while some clients suffered financially.

This included many clients of the Aegon platform not receiving the income they were due for a period of twelve days.

But Aegon and Aviva have both pledged they would compensate clients who lost money during the replatforming.

Minesh Patel, an adviser at EA Solutions in London, said he has stopped placing new clients on the Aviva platform.

He said: "Aviva was the fastest growing platform of the ones we use, in terms of putting new clients on there. But now we will only use it for existing clients, and as far as we are concerned both Aviva and Aegon are out of the game."