Overhauling the UK investment platforms market
By Kirsten Hastings, 21 Sep 18
AJ Bell boss calls for more disclosure, guidance, transparency and the removal of a ban
Regulatory guidance on bulk platform transfers
“Switching is the area I believe is most in need of regulatory intervention, particularly in relation to the suitability requirements for moving advised clients between platforms,” said Bell.
“The platform market has reached a stage of maturity where many technology systems need upgrading and consolidation of providers has started to happen. The inevitable transfer of clients onto new technology platforms is leading to a significant level of disruption at some platforms that may be the catalyst for advisers to decide to move blocks of clients to a better value and more suitable platform for their needs.
“Many advisers are put off moving clients in bulk because of the individual suitability requirements, even where it is clear a better-value option is available to a particular cohort of an adviser’s clients,” he said.
A switch between platforms can normally be achieved without any change to the underlying tax wrapper(s) or investments.
Bell continued: “Guidance from the regulator on what it expects of advisers in these situations could make this process easier for advisers, improve competition in the market and result in increased value for money for those involved.
“Ideally this would pave the way for a simplified suitability process that just focused on those differences between the ceding and receiving investment platforms such as charges, financial security and functionality.”
