The more client money you manage the larger any regulatory sanction. While these are indirect costs, they are real and serve to demonstrate why the oft-touted remedy of advisers paying directly for the platform is not perhaps the panacea some believe.
Market impact
In the meantime, the market study will be looking at whether “advisers have a positive impact on the cost and quality of the platform, and whether these benefits are passed through to investors”. We know from our conversations with advisers that this is a question they are frequently asking themselves.
Due diligence services have never been busier, and in part this is driven by the increased regulatory focus. It is also noticeable that most advisers have at least some concerns about the platforms they are using, whoever they are, with technology, strategy and leadership changes increasingly being raised as potential issues. Providers need to do more to help advisers answer these questions, and especially to ensure the cost and quality of the platform is clearly articulated, and the benefits are passed on to the end client.
Mike Barrett is consulting director of the lang cat
