More than half of IFAs shun 'complex' platform transfers: report

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More than half of IFAs shun 'complex' platform transfers: report

More than half (56%) of financial advisers that were questioned about platform transfers feel "constrained" from recommending a transfer because of "administrative complexity and cost", according to a study published today.

The report - conducted by the lang cat and AJ Bell - was designed in a bid to help financial advisers facilitate platform transfers, has unearthed a "head in the sand" approach from the majority of UK advisers when it comes to transfers, a point that Andy Bell, chief executive at AJ Bell, highlights.

"I have a lot of sympathy with advisers when it comes to platform transfers but unfortunately it is not an area where they can stick their head in the sand," he said. "The lang cat report is essential reading for any adviser grappling with their obligations around platform transfers under the PROD and COBS rules.

“None of this is easy, and real life is rarely reflected in the pages of a market study. But we think it is possible to create a much slicker transfer process that works for everyone involved, including the regulator" - Mark Polson, founder of the lang cat

The study points that advisers can't avoid platform transfers because it is "administratively difficult" and highlights that the relative price points of advised platforms are significant enough to warrant a transfer - over £90,000 for a 30 year investment, it states.

COBS and PROD rules

The report - which is available for free to advisers - shows the sections of the COBS and PROD sourcebooks that they need to comply with in reference to platform transfers. COBS and PROD rules are both clear that advisers have to keep the relative suitability of their platform recommendations under review and transfer clients if there is a more suitable platform for their needs, the study highlighted.

Mark Polson, founder of the lang cat, said: "It's clear there are cost and process issues that are preventing transfers from working properly. However, the regs state that advisers should recommend transfers where they are in a client's best interest. The fact the initial advice recommendation may be their primary platform that they prefer to use is neither here nor there.

"None of this is easy, and real life is rarely reflected in the pages of a market study. But we think it is possible to create a much slicker transfer process that works for everyone involved, including the regulator. 

"The truth is every participant in transfers needs to work on process. It probably doesn't take 15 or 20 hours to get one done if everyone involved plays fair and is on their game. Three to four hours might be more like it," Polson concluded. 

Bell added that he agrees with the study conclusion that this is an area where "the regulator needs to provide more guidance for advisers" but until then said that he is happy to sponsor this report so all advisers can get it for free.

To view the report in full click here.

 

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