Platforms charging orphaned clients more revealed

"Following the platform market study we’re currently reviewing this approach to ensure it remains appropriate," they added.

The FCA has previously said it is considering measures to tackle price discrimination on platforms between orphan and existing clients.

In its interim study regulator said: "We have two main concerns. Orphan clients have limited ability to access and alter their investments on an adviser platform so are paying for functionality that they cannot use.

"While many platforms told us that they encourage orphan clients to find a new adviser or switch to a [direct-to-consumer] platform, some platforms also charge orphan clients extra fees, of up to 0.5 per cent on top of their pre-existing platform charges."

One of the problems the FCA encountered was that, with one exception, platforms do not actively monitor whether there has been any activity on their customer accounts with ongoing advice charges.

The watchdog is considering imposing a requirement on platforms to check, if there is no activity on a client's account after a year, that they are still receiving an advice service.

But Ben Hammond, principal consultant at platform consultancy Altus, agreed with platforms they were likely to incur extra costs for dealing with an orphaned client.

He said most of the tasks will be quite small, such as dealing with clients requiring statements, but those costs are real "and it depends on the business model of the individual platform as to whether they pass that charge on".

Quilter currently has 10,000 orphaned clients, the highest number of the platforms Financial Adviser spoke to.

Standard Life said fewer than 3 per cent of its total client book across the platforms it runs were orphaned, equating to 5,500 clients.

Royal London had 695 orphaned clients at the end of July, the last month for which data is available. 

Alastair Cunningham, financial planning director at Wingate Financial Planning said: "If the service provided by the platform is the same, and no advice is being given by the platform, I cannot see why a non-advised client should pay more. That seems very sharp practice to me."

The Financial Conduct Authority (FCA) has not responded to a request for comment.