FCA sets sights on £592bn platforms industry in latest probe

The UK regulator the Financial Conduct Authority is targeting the £592bn fund platforms industry as part of its ongoing probe into the investments marketplace.

The FCA announced via a statement earlier today that it has published the terms of reference for the Investment Platforms Market Study, which sets out the scope and topics that will be covered by its latest probe.

The UK financial serves watchdog said that it is launching its latest study, as investment platforms are increasingly used by consumers and financial advisers to access retail investment products and to manage investments.

In particular the regulator is concerned at the stranglehold that the platforms industry has over the UK with more than 78% of the retail investment market now invested via platforms.

Christopher Woolard, executive director of strategy and competition at the FCA, said: “With the increasing use of platforms, and the issues raised by our previous work, we want to assess whether competition between platforms is working in the interest of consumers.

Significant benefits

“Platforms have the potential to generate significant benefits for consumers and we want to ensure consumers are receiving these benefits in practice.”

The FCA has set a date of 8 September for responses to the paper and aims to publish an interim report by summer 2018 which will set out preliminary conclusions and any potential remedies to address concerns.

Bill Vasileiff, pictured left, managing director at international fund platform Novia Global, welcomed the FCA’s report, but warned against too many changes potentially further confusing the consumer.

“It [the study] will be better for the consumer. Overall I don’t think that there is that much for the platforms industry to worry about. There has been some talk about cash rebates but I think that could actually confuse the consumer.”

Rob Yuille, head of retirement policy, at the Association of British Insurers, said: “Platforms have revolutionised the way that advisers and consumers invest, minimising fuss and providing a more holistic view of performance for consumers. They are a growing part of the long term savings market, where many types of firms compete to offer a wide range of products to suit customers’ needs.

“The FCA’s study rightly reflects this breadth and diversity, and the many factors that can have an impact on customer outcomes.” 

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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