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FCA to review investment platform market

The Financial Conduct Authority (FCA) will carry out an investment platforms market study in the coming year, it has announced.20 Apr 2017

The planned review, included in the FCA's business plan for 2017/18, will "explore whether platforms enable retail investors to access investment products that offer value for money", the regulator said.

"Following on from statements in the asset management market study on the role of platforms, the FCA's announcement of a market study on investment platforms emphasises the importance of platforms in the retail investment chain," said wealth management expert Tobin Ashby of Pinsent Masons, the law firm behind Out-Law.com.

"Despite the price reductions on platform charging in recent years, the FCA wants to look more closely at the impact on platforms on competition and value for money for consumers and, it is also suggested, a greater role for them in achieving these aims. This work continues the theme of the asset management study; that no part of the industry is left out of the FCA's assessment in seeking improved consumer outcomes," he said.

The planned study follows on from the FCA's interim report into the asset management industry, published last year. It will explore how 'direct to consumer' and intermediated investment platforms compete to win new and retain existing customers, and will take into account any relevant feedback received by the regulator as part of its asset management study.

"The interim report for the asset management market study identified a number of potential competition issues in the investment platforms market," the FCA said in its business plan. "These included: complex charging structures, if platforms' investment tools enable effective choice and whether platforms have the incentives and ability to put competitive pressure on asset management charges."

"The investment platform market study will allow us to understand the causes of any competition problems in this market and assess what we can do to improve competition between platforms and improve consumer outcomes," the FCA said.