Seven steps for better platform client outcomes
By Jessica Tasman-Jones, 16 Jul 18
From banning exit charges to drawing on the platform industry to tackle orphan clients, the Financial Conduct Authority has outlined seven remedies to improve consumer outcomes.
This is perhaps the biggest challenge laid out in the platform market study, according to EY director for life, pensions and health practice Dan Mahony.
The FCA is mulling whether platforms should be required to have a process in place that warns orphan clients that are no longer receiving ongoing advice that they should consider switching to a more appropriate proposition.
As such platforms would be required to determine whether a client has actively been using its service. The FCA found there are currently just over 400,000 orphan customers with more than £10bn of assets on platforms.
“The volume of work required to identify – and continually monitor those identified – is significant, and will take time and manpower to deliver,” Mahony said.
Aegon’s Cameron agrees this is a contentious proposal.
The Retail Distribution Review had removed providers, in this case platforms, from agreements between advisers and clients, whereas the FCA is now proposing reintroducing platforms to police whether clients are still receiving advice, Cameron said.
“We don’t know what other services an adviser is offering to clients, so just because there isn’t activity on a platform doesn’t mean that the client isn’t still receiving advice,” he said.
Tags: FCA
