Press Release

Statement from the Platform Group

27 June 2007

“We welcome the debate that the FSA paper seeks to kindle on the future of an industry sector that now accounts for more than £40 billion of assets. As the paper notes, the use of platforms is growing extremely rapidly as advisers consolidate their clients’ investments in a single place. We are pleased that the FSA has devoted the resources to undertake a thorough review of the impact of platforms at the same time as the Retail Distribution Review, and see this as recognition of the important role that platforms will continue to play in the retail market.

“We can see the attraction of platforms being covered by principles based regulation without the need for any additional specific rules.  Principles-based regulation is preferable to prescriptive rules, provided that the responsibilities for best practice and treating customers fairly are observed equally along all parts of the distribution chain. However, we do still have concerns that certain existing prescriptive rules may continue to hinder the beneficial development of platforms. We will continue to engage with the FSA on this.

“To date, platforms have brought greater transparency on charges and costs to the consumer. As the FSA points out, it would be undesirable if the rapid growth of platforms led to greater complexity and higher costs for the end investor. But we believe this can be easily addressed by allowing the operation of competitive market forces and ensuring responsible disclosure. The Platform Committee will continue to work with FSA and other stakeholders on simplifying the disclosure regime further for the benefit of consumers.

“It is also good to see the FSA dispel a few myths, such as the so-called 20% rule, that has been misinterpreted by some as a bar on putting more than a fifth of total business through any one platform. It is encouraging, too, to see that the FSA is calling on platforms to consider the implications of off-platform re-registration for the consumer.

“We look forward to a lively and constructive debate in the coming months”