The FCA's PS 13/1 included the recognition that platforms are not "ancillary to the activity of managing investments for the retail client".
Our new regulator sends the clear signal that platforms are responsible for helping advisers deliver better outcomes for clients. Hiding behind a mantra of 'just' being a technology supplier conveniently 'passes the buck' onto planners.
Platforms should champion the community of planners and the clients they support. Whether we like it or not, the collective voice of planners and platforms is more powerful than individual representation, whether lobbying the FCA, negotiating with HMRC, securing deals from fund managers or finding the optimum route through regulatory change. At
a basic level platforms are wholesalers of investments – collecting orders from advisers in bulk, processing them and breaking them down again for individual clients. Carrying out this task efficiently creates enormous savings for fund managers - savings that should be realised as client discounts. The negotiation of discounts is not the stuff of smoke- filled rooms, just the basic utility you should expect from using a wholesaler.
It follows that platforms should embrace clean fund pricing to create value for you – helping you identify better value solutions to try and achieve clients' goals. Rebates are opaque, poorly understood and hamper this process.
{desktop}{/desktop}{mobile}{/mobile}
Allowing the fog to linger prevents many planners from realising the enormous long- term savings possible from optimising portfolio costs in a transparent environment.
Finally, there's the debate around clean share class conversion.
This is a question of 'when?' and not 'if?'. Whether a platform does this in bulk, or planners carry it out for every client, it demands a very complex analysis - weighing up the long-term benefits of transparency (and thus clear choice) alongside relative fund costs across a portfolio at a point in time; without accurate real time data because additional expenses are calculated a year in arrears. Which approach is right?
Whether platforms or planners perform this exercise, there is inherent risk due to potentially subjective views of client disadvantage. Platforms that bulk convert absorb this risk, along with the complexity and cost, rather than passing it to you as the Financial Planner. This is exactly the role of a responsible platform provider.