The Financial Conduct Authority (FCA) will be looking closely at investment platforms to assess how to improve competition within the market for better consumer outcomes.
The FCA’s study will basically cover platforms and other firms offering similar services that allow investors or their advisers to access retail investment products and to manage investments through an online portal.
In the study, the FCA will:
- Explore whether platforms help investors make good investment decisions, and if their solutions offer investors value for money.
- Look at how platforms compete in practice and whether they use their bargaining power to get investors a good deal.
- Assess whether relationships between investment platforms and other platforms, advisers, asset managers, and fund ratings providers, work in the interests of investors.
The platform market has steadily grown over the last eight years, according to the FCA. Assets under administration for both adviser and direct platforms rose from £108 billion in 2008 to £592 billion in 2016.
“With the increasing use of platforms, and the issues raised by our previous work, we want to assess whether competition between platforms is working in the interest of consumers,” noted Christopher Woolard, executive director of strategy and competition at the FCA.
With platforms having the potential to generate significant benefits for consumers, Woolard said they want to ensure consumers are receiving these benefits in practice.
Related stories:
FCA proposes amendment for sovereign-controlled companies
FCA launches travel insurance investigation: reaction
.jpg)
