The FCA is to launch a review of intermediary and direct-to-consumer investments platforms to look at risks in the sector and ways to “improve competition.”

In its 2017/18 Business Plan, the regulator says it will also be undertaking projects to find out if there are specific areas of risk in the investment platform market it should address “now and in the future.”

In its Business Plan published today, the watchdog says that it will launch a study into how direct to consumer and intermediated investment platforms compete to win new, and retain existing, customers.

An interim report for the Asset Management Market Study identified a number of potential competition issues in the investment platforms market, says the FCA. These included: complex charging structures, if platforms’ investment tools enable effective choice and whether platforms have the incentives and ability to put competitive pressure on asset management charges.

The FCA said: “The study will explore whether platforms enable retail investors to access investment products that offer value for money. When scoping the study, we will take into account relevant feedback we
receive on the Asset Management Market Study.

“The investment platform market study will allow us to understand the causes of any competition problems in this market and assess what we can do to improve competition between platforms and improve consumer outcomes.”

There will be a review of whether some DIY investors are at risk of buying investments not appropriate for their risk tolerance and whether they might be getting poor value for their money.