There is "no evidence" the rules requiring greater disclosure of costs and charges are benefitting clients, according to David Tiller, head of proposition at Aberdeen Standard Investments.
Platforms, fund houses and advisers are required under European regulation the Mifid II rules to provide the end client with a breakdown of transaction costs they are paying in a fund they own, research costs, and the total cost of ownership. These rules were introduced at the start of 2018.
But Mr Tiller, who has ultimate responsibility for the company’s Elevate and Wrap platforms, said: "The platforms ultimately helped the regulators deliver RDR, and I think that is not always remembered, and there is huge alignment.
"But the disclosure rules, there is no evidence that despite all of those, that the end customer is any the wiser."
Mr Tiller was less critical of the rules around non monetary inducements. The rules, which are the preserve of the Financial Conduct Authority, require that any inducements received by advisers from platforms must be shown to be in the best interest of the client.
The effectiveness of these rules was examined by the FCA's interim and subsequent platform market studies.
The final platform market study stated that the non monetary inducement rules were working well but urged platforms to be mindful of their responsibilities and review the rules in place.
Mr Tiller pointed out the regulator had mentioned bulk rebalancing as an issue in its interim report, but had not returned to it in the final report out this month.
He said: "The [Financial Conduct Authority’s] interim platform market study was a little confused. It said bulk rebalancing could not be shown to be in the interest of the end client.
"But if an adviser has to do the balancing one at a time, there is a cost to that, and that is passed onto the client eventually, so that is how the client benefits from bulk rebalancing."
In contrast to disclosure rules, Mr Tiller said the FCA's inducement rules were quite clear.
He said: "There is regular dialogue between the platforms, and the platforms and the regulator, so I don’t think the rules are unclear.
"Everything we do in these areas ultimately benefits the client, and the truth is, something like white labelling, if that’s what an adviser wants, there is no incremental cost to Aberdeen Standard Life to doing this."
david.thorpe@ft.com
