Ascentric is warning the FSA’s guidance on single platform suitability may drive advisers to switch wraps for the sake of it.
Speaking at The Platforum Annual Conference today in London, Ascentric managing director Hugo Thorman (pictured) said an unintended consequence of the FSA’s guidance, which states that it is unlikely one platform can meet all clients’ needs, would see advisers look to move some clients to another platform simply to satisfy the regulator.
Thorman said: “We have had transfers unfortunately that were not always for the right reason, that is one of unintended consequences of 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.”
The FSA has previously said it was unlikely advisers could use one platform to meet all clients’ needs.
Thorman went on to add that Ascentric’s white label offering, Independent Funds Direct Limited, would overtake the Ascentric platform in terms of attracting new business.
He said: “Although the Ascentric platform is doing well, the white label business is growing and we would expect that to overtake Ascentric as we put more emphasis on offering firms a white label solution through IFDL.”