Concerns over the positioning of best buy funds on platforms, consumers’ understanding of charges and the failure to pass on discounts to customers are the key reasons for the FCA is launching a review of the investment platforms sector later this month.
Speaking at a Transparency Task Force event today, FCA head of department, competition Robin Finer said the regulator’s research had raised questions around the transparency of charges on investment platforms and consumers’ ability to compare prices between different providers.
Sophia Morrell, parliamentary assistant to Jonathan Reynolds MP, Labour’s shadow City minister, raised concerns over the lack of access to low-cost ETFs on platforms.
The regulator says further information will be released later this month in when it publishes its Investment Platforms Market Study Terms of Reference document.
Finer said: “We have some questions about the mechanics by which funds were positioned on platforms, particularly those on best buy lists. We also saw some evidence of negotiating of discounts by platforms, but we saw a patchy passing on of these discounts to customers. So there are questions on how platforms are competing and how they are passing on discounts to their customers.”