IFA-owned and controlled wrap platform Nucleus has responded to the FSA’s Platform Discussion Paper DP10/2 urging the regulator not to undermine its proposals in the face of industry pressure and to stand by the principles of transparency outlined in the RDR.
The platform has asserted its position in response to the Discussion Paper, with key recommendations outlined below.
- Platform remuneration: Nucleus welcomes the FSA’s stance on remuneration, particularly in relation to shelf-space fees, guided architecture and interest on cash deposits. In addition Nucleus advocates that platforms that impose commercial barriers to fund management groups be compelled to make the new rules available to users.
- Payments from product providers to platforms: While Nucleus agrees with the FSA’s stance it believes that the complexity of the issue prevents transparency of such payments being sufficient to allow advisers and consumers to form a full appreciation of the underlying commercials.
- End of product charge rebating: Nucleus believes that preventing asset managers from rebating overcharges in the unit/share price to clients would intuitively lead to additional charges for asset managers and may also lead to weaker cashflow within clients’ cash accounts, resulting in a requirement for units/shares to be redeemed to meet platform and adviser fees.
- Platform use by adviser firms: Nucleus believes that where an IFA uses a platform that offers vanilla tax wrappers and has completed due diligence there should be nothing to prevent extensive use of a single platform.
- Platform / investor information: Nucleus proposes the establishment of a best practice charter that would drive the creation of a set of standard behaviours for different transactions.
David Ferguson, Chief Executive and founder of Nucleus, commented:
“We warmly welcome the FSA’s recommendations and applaud their conviction in delivering such a progressive document, particularly in relation to re-registration, unbundling of charges and commission payments, which we expect to have a positive impact on consumer understanding and engagement with retail financial services.
“However as there is and will remain a significant lobby from elements of the platform sector that would prefer to retain the status quo, we would strongly urge the FSA to stick to its guns and not be swayed in the run-up to 2012. We are hopeful that the FSA will continue to engage with the adviser community to genuinely enact the level of transparency they have set out to achieve with the RDR.”