The company said some platforms are “only now beginning” to confront the April 2013 deadline for the phase out of payments relating to legacy business with fund managers.
It said that meeting the deadlines will give rise to “significant operational challenges and potential tax liability issues” for customers.
Following an FCA statement in April 2013, platforms had to ensure that all payments between fund managers and platforms ceased for new business from 6 April 2014. However, they were allowed a further two years to phase out such payments.
Altus consultant, Ben Hammond, said: “Although sometimes forgotten, the customer must be the central focus here.”
He added that it is “essential” for platforms to work closely with their advisers to sell the value of their service to customers, and then transition them into “clean share classes”.
“Some platforms have been running an explicit proposition for several years pre-Retail Distribution Review, possibly in parallel with a bundled offering, and so could be fooled into thinking the task is easy.
“That could be a costly mistake; ‘sunset’ may seem a long way off, but there is a lot to achieve in a very short space of time.”
Last month, an Investec survey revealed that four in five intermediaries believe some advisers will fail to complete the transition from commission to fee-based remuneration in time for the FCA’s deadline because of fears over client and revenue loss.
58% of surveyed advisers said they believe some advisers will miss the deadline due to a fear of losing clients and revenue, while 59% cite a failure to change business models.
Altus Consulting is a specialist provider of consultancy services to the financial services sector.
