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Aegon welcomes FCA’s ‘proportionate and targeted’ investment platform report


Steven Cameron, Pensions Director at Aegon, comments on the FCA's Investment Platform Market Study Interim Report…

We welcome the FCA’s largely positive Investment Platform Market Study findings and the proportionate and targeted set of remedies it is now considering. Platforms continue to rapidly replace traditional life companies at the heart of financial services and we are pleased the FCA has found competition is working well for most platform customers.
 
As in most areas of financial services, advisers play a key role in supporting customer decision marking and we welcome the distinction between advised and D2C platforms and the remedies under consideration for each.
 
As in the Retirement Outcomes Review, the FCA is exploring how to make it easier for customers without advisers to shop around. It is right to explore remedies based on improved disclosure of charges, although elsewhere the FCA has accepted that disclosure-based solutions do have their limitations.
 
It’s important that individual customers, whether or not advised, don’t face undue barriers if wishing to switch between platforms and we’re pleased the FCA is awaiting improvements which should emerge from the Transfers and Re-registration Industry Group before considering if any further remedies are needed here.
 
Model portfolios are an alternative to multi-asset funds and can offer customers an improved investment solution. We support FCA aims to make sure customers can understand and compare the risk profiles within these and that charge disclosures are clear and comparable.
 
The FCA’s concerns that customers, particularly in D2C platform, may be holding excessive amounts in cash, and therefore missing out on investment returns, mirror similar concerns for drawdown customers highlighted in the Retirement Outcomes Review.
 
While the Report continues to look at how platforms can exert competition pressure on asset managers, it fails to recognise that ‘open’ platforms have less negotiating power with fund managers than those which limit the funds on offer or which influence customers towards particular funds.

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