Advisers are struggling with "inconsistencies" when getting data from platforms as part of cost and charges disclosure under Mifid II, the chief executive of the Personal Finance Society has said.
This has contributed to the Financial Conduct Authority’s findings that the industry has been "slow to comply" with the rules, according to Keith Richards.
In a review published last week the regulator found levels of compliance under Mifid II had improved but some companies "still had work to do" and were better at disclosing the costs of their own services than those of relevant third-parties.
Cost disclosure requirements under Mifid II came into effect in January 2018, but it is only this year advisers have had to begin disclosing actual costs and charges associated with client investments, rather than just estimates.
The FCA found some advisers were leaving out transaction and incidental costs and charges because they could not get the necessary data and were claiming this was compliant since the rules allowed them to estimate the costs as zero.
Mr Richards said the PFS and a number of its members had submitted evidence to the FCA that some adviser companies had struggled to get all the data required from others in the disclosure process.
Challenges arose, Mr Richards said, when platforms and providers each adopted different approaches to disclosure under Mifid II and which led to advisers finding "inconsistencies" in how they could obtain the required information.
He also suggested the extension of the initial deadline for compliance under Mifid II had led to providers and platforms "pushing back the urgency" of being able to provide data to advisers.
Earlier this year FTAdviser reported the disclosure methods used by providers may cause issues for advisers, following research from The Lang Cat showing the majority of platforms intended to send cost statements directly to clients.
Speaking at the time a spokesman for one large platform, which wished to remain anonymous, said it had received ex-post disclosures for less than 50 per cent of the funds on its platform.
Mr Richards said: "What we have seen occur is predictable when the whole market, including providers and platforms, is having to make its own interpretation of requirements under the new rule, often systems will need to be changed to provide the level of disclosure required and that takes time."
The FCA had always responded "constructively" to concerns raised by the PFS, Mr Richards said, with the regulator acknowledging early challenges and maintaining it accepted time was required to allow requirements under Mifid II to "bed-in".
He added: "Even though the regulator also found that firms in the sample interpreted the rules inconsistently, making like-for-like comparisons of costs and charges difficult, it was clear that the spirit of disclosure and transparency is evident across the sector."
In its review the FCA found examples of good practice that exceeded compliance under the rules, including technological innovation in disclosing costs and charges, but warned it did not consider advisers simply leaving out costs they could not obtain as an appropriate interpretation of the rules.