“If you consider the variety of options that are now available for clients in retirement, and the fact that they are likely to remain invested on platforms for longer, platforms need to get the basics right for delivering income – otherwise clients may find that they don’t receive their income when they expect it.”
Old Mutual’s Mr Levin says platforms can help generate efficiencies that benefit advisers and their customers.
“Advisers must be able to demonstrate that the platform/s they select off of the services and administration capabilities are appropriate for the adviser’s business model.
“This includes looking across their client segmentation structure to ensure the derived benefits meet the needs of their customers,” he continues.
“The FCA is not prescriptive in the number of platforms advisers can use, but it is clear that good client outcomes and a culture of challenge should be at the centre of the decision-making process.”
Table 3 shows each platform’s charges. From 6 April 2016, the FCA’s ruling regarding how the platforms should be paid for the assets that they hold came into effect.
This clause, which many have named the “sunset clause”, means any change to legacy business requires platforms to have access to clean shares classes or have the ability to pass on contributing payments in full by small cash or unit rebates.
The clean share classes should have a lower annual management charge than previously, and will also exclude the portion of the fund that was rebated to advisers in the past, but was banned when the Retail Distribution Review (RDR) came into play.
Many platforms made the change to clean, unbundled share classes years in advance, so have not been deeply affected by the changes this year.
Table 4 also looks into funds available on each platform. It details how many funds are available as well as the types of wrappers and product types available on each platform. Investment trusts and exchange traded funds (ETFs) have traditionally been difficult to access on a platform, but now all but two platforms have both available – Cofunds and Old Mutual Wealth have yet to make the move. Only Praemium and Transact offer all of the product types.
Table 5 details the cash accounts for each platform. Over the years, there have been some simple changes, but there have not been any changes that stand out since last year’s survey.
Regulations and restructures
While platforms have seen regulatory changes of their own in recent years, other products have undergone restructures that could indirectly affect platforms, such as the pensions freedoms that were introduced last year and a new Isa (the Lifetime Isa) has been launched.
