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
A lifting of the ban on cash rebates
“Another barrier to platform switching is the proliferation of multiple share classes following the RDR,” Bell explained.
“A knock-on impact of this complex web of share classes is it has made the process of transferring between platforms harder in cases where investors hold a share class that is not available on the platform they want to transfer to. This can potentially get in the way of investors switching to a better value platform and hence is not helping competition in the market.
“Moving back to a single retail share class for each fund, with discounts applied in the form of cash rebates payable for the benefit of customers (rather than the platform), would make the process of re-registering between platforms significantly simpler.
“This would also make it easier for platforms to negotiate discounts for their customers, in the form of cash rebates paid directly back to their platform cash account, thereby addressing the FCA’s concern that platforms are not using their scale to deliver better value for investors.”
