31/07/2017
In response to potential competition issues in the rapidly growing investment platform sector, the Financial Conduct Authority has announced a market study to assess whether investors are receiving the full benefits of platforms and whether competition is working in their best interests.
Platforms are services that enable both individual investors and financial advisors to buy and manage retail investments online. The ‘assets under administration’ (AUA) by them increased from £108bn in 2008 to £592bn in 2016.
‘Investment platforms market study: MS17/1’ follows on from the June 2017 Asset Management Market final report, which identified the potential competition issues in the sector.
It describes the scope and terms of reference of the study, which will cover platforms and firms that provide similar services by allowing investors or financial advisors to access retail investment products through an online portal.
Among other things it will explore
- whether platforms help investors make good investment decisions and whether their solutions offer value for money
- how platforms compete in practice and whether they use their bargaining power to get investors a good deal
- whether platforms’ interaction with other platforms, advisers, asset managers and fund ratings providers works in the interests of investors
The FCA welcomes feedback on these and other topics by 8 September and will publish an interim report by summer 2018.