Hi all. So what’s been going on since we last spoke? Hope the transition to RDR went smoothly for all (she says with a wink). I am going to be sharing some of the more interesting conversations I have had over the last month or two, insights from the goings on at Platforum HQ and some snippets from the Financial Conduct Authority about platform due diligence.
Well, I have to say that the first three months of this year have been manic – I have been all over the place talking to advisers eager to now press on with those final few niggling bits and pieces for life in the post-RDR world. The documentation of platform selection is one of those loose ends advisers have been putting off – everyone knows they need to do it and the regulator has been clear in its communications long before the RDR, but no-one really seems to be sure exactly what is required, how often and what it should look like. Please DON’T sigh and turn the page... Hear me out!
How many times do I walk into a firm and the principal says “just tell me what I need to do to continue using platform X” – sound familiar? I will continue. Most firms we speak to nowadays are using platforms in their business as formality, it’s nothing new anymore it just makes sense – platforms provide a pretty good way of processing business in a systematic way, FACT. BUT there are, at the last count, I think 30+ providers in the adviser space – so is it ok to just assume that the platform(s) you have been using for the past two years is still right for your firm? The answer is no, it’s not ok.
I think my first question to most firms is which platform do you use, and what do you think of it? At The Platforum we like to share all the adviser feedback on platform experiences via our User Leaderboard – it’s free of charge so do take a look and please do us leave your own reviews. It’s worth spending 5 minutes reviewing your peers’ experiences for you to make a call as what’s important and what’s not – to you.
You would be surprised how many times adviser firms tell me:
“Yeah, they are alright”
“Bit slow in responding when there’s a problem which drives me mad”
“They don’t have ETF’s – very frustrating”
“Lots of whizzy gadgets which I just don’t use but they seem to be ok and I like the BDM”
The point I want to make to you all here is that maybe the platform(s) you are using are absolutely right for your business and your clients, but you need to test that theory and there are certain things that make the testing easier to measure.
As I am writing this blog I have spent the day with the lovely and very astute Rory Percival, Technical Specialist at the FCA. Rory has been speaking at our annual spate of adviser roadshows up and down the country. This year the theme is “Best Practice”. Rory has been very public in expressing just how different the new FCA are to the old FSA. I quote “the FCA are absolutely not the FSA rebranded – the whole structure, culture, supervisory is all very different.” Rory, we hear you loud and clear, yet advisers are still nervous, confused and wanting that checklist for satisfaction.
I am sure the FCA have learnt a thing or two from their predecessors; however, advisers, listen up – supervision of platform use will be on the hit list of thematic reviews later this year. There are no checklists and there are no formal guidelines FACT – but there is guidance and there are tips.
PATs 5 tips on platform due diligence which makes the FCA happy
- Platforms: using wraps and supermarkets
This factsheet is referred to time and time again – have a read of the 9 areas considered important with respect to platform use BUT do not just use this as a template, more to formulate your thinking.
- Ask your clients
I’ve heard Holly Mackay tell advisers it’s not Treating Customers Fairly (TCF) it’s actually “Treat your granny fairly.” The FCA told me recently that they had not yet met one firm who, when they asked their clients about their service, didn’t learn something (and subsequently change or review their service as a result).
- Think about it
Be really really honest with yourselves about exactly what it is you want the platform to do – is it simple trading or execution or do you want that integrated cash-flow modelling tool? How well has your chosen platform done – have they overpromised and under-delivered? How important is having access to ETFs?
Reviewing the market, eliminating those obvious no no’s but revisiting any providers discounted in the past who might now look good (or your peers recommend a second look). What does the pricing look like? How good is the service? What do others think? Will this provider aid delivery of my client service proposition (and for all clients)? Should I have a different provider for some of my clients? What does this service look like?
- Document it
A good due diligence document is one where the firm has documented their thought process and highlighted their key criteria and justified their selection which matches their own objectives in achieving good customer outcomes.