The Financial Conduct Authority is to cover ‘wrappers’ platforms including self-invested personal pensions and ISAs in its Investment Platforms Market Study, it has revealed.

The FCA has today, 17 July 2017, published the Terms of Reference for its Investment Platforms Market Study, which outlines the scope and topics that will be covered in the upcoming report.

Considering the platforms retail investors and their advisers or wealth managers may use to invest, the regulator is including ‘wrappers’ platforms such as SIPPs and ISAs. “Some will be saving for retirement, others will be investing for specific future life events and others may want exposure to stock markets without necessarily having a specific investment objective,” the FCA said in the Terms of Reference.

Occupational pension schemes, however, are not within the scope of the study as they are not widely available to retail consumers through an investment platform, the FCA stated.

It was also noted that the study will aim to understand whether consumers and their advisers are driving competition between platforms and “whether platforms are responsive to consumer needs”.

The study is set to be broad in scope, looking at a number of products and services from consumers to fund managers. It will focus on all aspects of value experienced by consumers using platforms, consider barriers to entry, its costs and competition in the platform market, consider the impact of advisers and assess the products and services available across platforms.

FCA executive director of strategy and competition Christopher Woolard, said: “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. Platforms have the potential to generate significant benefits for consumers and we want to ensure consumers are receiving these benefits in practice.”

Hargreaves Lansdown head of policy Tom McPhail commented: “The FCA has set a very broad scope for this study; the terms of what constitutes a platform can include online portals, life insurance companies, wealth managers and banks; in effect any organisation providing a retail investment service is likely to come under scrutiny.

“This study recognises the vital service platforms now provide to millions of people, helping them to save and invest for their future. The advice gap remains and platforms have an important role to play in delivering guidance and support to investors, many of whom need help if they are to invest with confidence.

“Platforms can also bring pressure to bear on asset management costs, negotiating discounts for investors, promoting good funds and highlighting poor performers.”

The regulator is to set out its interim findings in summer 2018.

Share Story: