The Financial Services Authority has confirmed today that it is proposing to ban all payments from product providers to platforms.
This would apply whether an investor is using a Financial Planner or financial adviser or making their own investment decisions.
The confirmation follows an announcement last August that the idea would be 'desirable' but required further research.
In its latest paper 'CP12/12 Payments to platform service providers and cash rebates from providers to consumers' the FSA says it hopes the changes will make charges clearer to investors and increase competition in the market.
At present, product providers pay to have their products included on a platform and this cost is then passed to the investor in the price of the product.
The new rules would mean investors and advisers would be able to compare the costs of investing through different platforms and decide which represented best value for money.
The FSA is also consulting on whether the ban on payments should be in place across the wider retail investment market including Sipps and life companies.
Sheila Nicoll, director of conduct policy at the FSA, said: "Investors are increasingly using platforms as a convenient 'one stop shop' for their investments, but at the moment many investors have no idea what they are paying for this service, while some believe it is free.
"This needs to change. Today we are proposing changes that give investors and their advisers more control and mean they know exactly what they are paying for a platform's service."
Finalised rules will be published by the end of the year to allow platforms a year to implement changes before 31 December 2013.
Ed Dymott, head of business development at Fidelity, said: "There are few surprises in today's platform consultation paper, with most of the policy being already well debated. We welcome increased transparency and have already taken a lead here in the market.
“Before today, the RDR risked being purely a review of financial advice. However, the FSA seem committed in broadening this to other parts of the market and actually making this a distribution review. This is a sensible step, but we are concerned that this addresses just a fraction of the current market. We will fully engage in the consultation process to ensure the FSA objectives can be effectively achieved.”

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