The FSA says it is “horrified” that advisers may be switching wraps unnecessarily to prove they are using more than one platform.
Speaking at The Platforum annual conference in London last week, Ascentric managing director Hugo Thorman said an unintended consequence of the FSA’s guidance, which states that it is unlikely one platform can meet all clients’ needs, will see advisers look to move some clients to another platform simply to satisfy the regulator.
Thorman says: “We have had transfers unfortunately that were not always for the right reason. That is one of unintended consequences of the instruction and guidance given by the regulator.
“We have had advisers saying ‘we are going to have to scale back and move half of the clients across to another platform’, not necessarily because they are more suitable but because that is the only way they can demonstrate to the regulator they are not using one platform.”
But FSA technical specialist Rory Percival urged advisers to ensure they are appeasing their client rather than simply looking to satisfy the regulator.
Percival said: “An adviser moving business to another platform because that is what they think the regulator expects is something I find horrifying and annoying. There is no secret checklist the FSA demands from advisers over platform use, it is about making sure your client is looked after and if that is done then the FSA is happy.”
Percival added that parts of the industry seem to have misunderstood the FSA’s guidance in this area.
He said: “The notion that the FSA says advisers need to use two or more platforms is a fallacy. It is all about what is suitable for each client.”