Advisers are reluctant to transfer clients from Aegon and Aviva because of the length of time and quantity of paperwork required, despite the woes experienced by users on those platforms.
Minesh Patel, an adviser at EA Financial Solutions in London, said he wouldn't place any new business with the Aviva platform but he has not transferred any clients away from the platform because the regulatory challenges were "not straightforward".
Mr Patel said Aviva had once been the "fastest growing" platform in terms of receiving new business from his firm.
He said the level of reporting to the regulator which must be done when switching clients was a significant drain on an adviser's time and he said it was unclear whether he could then charge the clients for this.
His comments come after the FCA’s recent platform market report, which highlighted the difficulties faced by advisers seeking to transfer between platforms.
The regulator described the task of switching platforms as "burdensome", saying certain platform practices - such as offering volume discounts and white labelling - could act as disincentives to switch.
It also said the availability of different share classes on different platforms was a "further complication".
As a result, the FCA found the majority of advisers - more than nine in 10 - said they moved a client’s investment from one platform to another less than every five years.
Ian Lowes, managing director at Lowes Financial Management in Newcastle, said: "If we could transfer quickly and easily we would have done so by now for a number of very upset and irate clients but given that the system has so many issues and getting a withdrawal, or even income payments out of Aegon is problematic we’re probably all best served by sitting tight, praying for some light at the end of tunnel."
The FCA decline to comment.
david.thorpe@ft.com
