Advisers who have moved all their clients onto one or two platforms for ease of admin will have to justify any associated platform fees after Mifid II comes in.
This is the view of Mark Stevens, head of intermediary services at Investec Wealth & Investment, who warned advisers not to ignore "Mifid II coming onto the horizon".
The European Union directive, which is set to come into force on 3 January 2018, is bringing in a series of amendments and enhancements to the first directive, including clearer client-facing communication and much more transparent disclosure of fees, remuneration and any incentives.
According to Mr Stevens, those intermediaries who have simply bundled the majority of their less high-net-worth clients onto a platform for ease of administration will have to provide a clear breakdown of costs.
"Unless it is a clear benefit to the client, then why should the end client pay money for the IFA's ease of administration."
Mr Stevens also said Mifid II would be a "potentially large positive for discretionary fund managers" as advisers would have to look for better solutions for their clients.
It is important not to pigeon-hole any client or force them all into one scenario. Mifid II reporting and transparency will bring this issue to the fore next year.Mr Stevens said: "We have long advocated the view that a platform investment for any client is about selecting the platform and funds for each client, individually, and monitoring their investments.
"It is not about putting all clients on there for ease of admin."
Therefore, he said Mifid II requirements, coupled with general market and economic pressures, would come at a time when there is greater consolidation in the platform market.
He explained: "We do not have all the answers but it is evident there are a number of smaller platform providers who will struggle, and a number of advisers who have been insourcing investment portfolios, who will have to look at out-sourcing after Mifid II."
Because they will have to cope with the administrative burdens of disclosure of risk, remuneration and assets, as well as carry out enhanced reporting, this would cause "serious problems for some advisers", he said, and those smaller platforms without the resources or commitment to developing a post-Mifid II proposition.
Mr Stevens forecast could see a greater move towards larger platforms and outsourcing.
He also mentioned the various platform costs, trading costs, the various price of the underlying collective and the 'opportunity cost' of getting into a fund at a particular time in the market's cycle as being too difficult to control.
Therefore, in some cases, he said the smaller, piece-meal costs that are generated by being on a platform - coupled with the adviser's own fee - could mean the client who is put on a platform is paying a "cost comparable to the fee paid to a discretionary fund manager for a bespoke managed fund".
"As the Retail Distribution Review showed", Mr Stevens added, "cost is important but it is not the be-all and end-all. It's about what is appropriate to a client.
"Where I have a degree of discomfort is where clients of any net worth have been shoehorned into any particular service.
"It is just as remiss to put a client with specialist needs on a 'set and forget' platform as it is to put clients with smaller pots into a fully bespoke portfolio service where the charges are disproportionate."
Mr Stevens added: "It is important not to pigeon-hole any client or force them all into one scenario. Mifid II reporting and transparency will bring this issue to the fore next year."
However, he said he could see a development in the future whereby an adviser might use one or two platforms for those less wealthy clients - albeit in a proactive way that is appropriate to each client - and using discretionary services off-platform for the high net-worth clients.
This came as FTAdviser reported that platforms have failed to provide up-to-date information to help advisers assess whether a platform is suitable for their clients.
According to research by Tony Catt, compliance consultant at TC Compliance, advisers and clients have not been provided with up-to-date information.
His survey of 19 adviser platforms, taking into account the results of 3,661 platform service questionnaires completed by advisers over the past two years, found this was the main issue affecting the industry.
simoney.kyriakou@ft.com
