The Financial Conduct Authority (FCA) in the UK has set out new rules for the way investors will pay for platforms that come into effect from the 6 April 2014.

The regulations will make it clearer to customers what they are paying for, and get rid of the ‘rebate’ style payment commonly used.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

The FCA said it can often be hard for investors to compare products and prices, and bias in the market, with the move aimed at making the true cost of services related to platforms clearer.

The current model used by many managers allows them to give the impression they are offering free services, when costs are hidden in annual management charges.

 

Christopher Woolard, director of policy, risk and research, said:

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

"These rules ensure that platforms put customers at the heart of their business. Customers will know what they are paying and the service that they can expect. We have listened to industry concerns and have introduced rules that are proportionate, recognise how the industry works in practice and the competitive role platforms play in the market."

Rebecca Prestage, of The Consulting Consortium, a compliance services body, said: "We welcome the creation of a level playing field and the increase in transparency so that consumers will be able to readily compare cost and assess value, whether that be with the use of an adviser or without (execution only).

"Whilst the short term pain will be for platforms and providers, with costs to systems etc, ultimately this will be a good thing for consumers and advisers going forward.

"We would also expect due diligence of platforms to be of increasing importance, as these changes mean that multi share classes will become more common."