26th April 2013

Fidelity response to the FCA Platform Policy Statement

Ed Dymott at Fidelity Worldwide Investment comments: “2013 marks a turning point for platforms. The publication today by the FCA, coupled with the recent HMRC rules, will affect all platform businesses and the outcomes will change the market landscape.

“There are few surprises in today’s policy paper, and it is in line with our expectations. As such we are extremely well positioned to meet these requirements. The rules require the industry to move to new pricing models and share class structures - we plan to do this in a way which allows our customers to transition as efficiently as possible.

“Our primary concern is to ensure that customer outcomes are not materially impacted in what will be a significant period of change. We will announce further details over the next few months as to how we will transition into this new regime. However, already today we are already operating very much within these guidelines. Overall focus remains that we continue to deliver choice, transparency and value to our customers.” 

On the legacy rebate ban:

“We were well aware of the proposed sunset clause and we feel it is a sensible approach to transitioning customers to the new rules. The two year period gives platforms an ability to manage this process as efficiently as possible, although there is no reason why a platform should wait until 2016. Our one concern is around what this means for the advisory market, as it is likely they will need to transition in line with this process.”

On review of adjacent markets:

“We welcome the fact the FCA has set out their belief that these rules should be applied to other adjacent markets. We have always argued for consistency across platforms, SIPP providers and insurance providers. The proposed consultation will be good for consumers and will reduce the risk for confusion and any market distortion. For too long the debate has just been around platforms – when in reality the same approach should be applied to all providers of long term savings.”

On rebates:

“The FCA decision to allow unit rebates, will provide some flexibility for platforms, and allow another mechanism for consumers to receive better outcomes. We are also pleased the FCA listened to the need for a de-minimus. That said, following the HMRC recent rulings on rebates, we do feel that this model will quickly become redundant.” 

On the execution-only market:

“The FCA always made it clear that these rules would be extended to the execution-only market. We believe that this will bring welcome consistency. The key now is for platforms to transition their customers to this new model over the next 12 months. We believe this must be done in a way that does not create any detrimental consumer outcomes. We will announce further details of our approach over the coming months.”

Wraps & Platforms