As the six nations are preparing for a second weekend of rugby, closer to home there was plenty of talk about competition too.
Data out this week pointed to a lack of competition in advisers' fees while the City watchdog fired another round of warning shots — this time at platforms. It’s time for the week in news.
1 Glorious fees
Advisers were warned this week the market could be at risk of being found uncompetitive as data revealed the majority of advice firms who charge ongoing fees fall into three ‘price clusters’.
The numbers from the Lang Cat showed about 86 per cent of advisers who charged an ongoing fee levied either a 0.5, 0.75 or 1 per cent charge on their clients.
Experts warned the City watchdog was likely to find this level of price clustering uncompetitive, as it did with the asset management industry just a few years ago.
Meanwhile, advisers were told the fee ‘race to the bottom’ has only just begun as the battle between platforms, investment managers and advisers continues to push fees downwards.
2 Looming levy
Costs also hit the headlines in terms of the lifeboat levy this week when the Financial Services Compensation Scheme boss said she appreciated the “burden” the levy placed upon the industry.
Caroline Rainbird, the scheme’s chief executive, told FTAdviser the recent increase to the levy was “regrettable”, but noted it was necessary to pay consumers stung by scams.
She sought to reassure the industry, however, promising the FSCS was working collaboratively and collectively to reduce bad consumer outcomes to be able to cut the levy.
3 Platform tech warning
Also this week, the FCA sounded the alarm on replatforming issues and urged firms to ensure tech upgrades were planned and tested before being rolled out.
In its fourth Dear CEO letter to the industry this year, the watchdog said bad technology could affect a platform’s service to advisers and that upgrades and changes could exacerbate these issues.
It also noted conflicts of interest within platforms, and the need for improvements on transferring, day-to-day trading processes and information on charges.
4 Leeway on pension laws
In a busy week for the regulator, the FCA also met the industry halfway by addressing some of the concerns about the proposed new costs and charges regime for workplace pension schemes.
The new rules, which require firms to publish the costs and charges imposed on scheme members, will now only apply to default funds for the first year the rules are in place.
The FCA has also amended its sourcebook to clarify that any information communicated must be done so in a suitable way after respondents argued the huge volume of data would mean members would be unable to fully digest it.
5 IR35 probe
A House of Lords committee launched an inquiry into the controversial changes to the off-payroll working rules, ready to come into effect in April, which would see the IR35 structure rolled out to the private sector.
The finance bill sub-committee will look at how the rules have affected the public sector and what the impact will be on private organisations.
IR35 specialist Qdos’s chief executive, Seb Maley, welcomed the inquiry but urged businesses and contractors to continue to prepare for reform.
Just today (February 7) HMRC shifted the start date for the rule changes in a bid to give businesses more time to prepare.
imogen.tew@ft.com
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