A recent publication released by the Financial Conduct Authority (FCA) shared the terms of reference of a current market study which focuses on investment platforms in the UK. The study seeks to gain an in-depth understanding into the nature of the competition surrounding the provision of investment platforms, and in particular, whether this competition is effective and benefits the consumer. The FCA intends to publish a report by summer 2018, which will unpack their findings and conclusions.
A closer look at the scope and purpose for its investment platform market study provides insights into how the FCA will look to assess the impact on consumers and their experience of retail investment products in terms of choice, cost, and proposition. Undertaking such a study in a mature and developed platform market, such as the UK, makes sense. Elsewhere in Europe, and indeed in other countries further afield, platforms are much less developed and may even be poorly legislated by the local regulatory body. Consequently, there is much less local regulatory focus on investment platforms within these locations outside of the UK. However, there is a growing number of international platforms which are proving to be increasingly attractive to international advisers, expat clients, and product providers (such as offshore bond and international pension providers) who are located outside the UK.
Therefore, with less local regulatory focus on the interests of consumers outside the UK, the question begs to be asked; “How do advisers seeking an international platform assess their options?” They need a solution to support their offshore client requirements, which offers a robust, secure, and client focused platform solution.
Here are five key deliverables we believe an international investment platform should offer clients and advisers outside of the UK to demonstrate a consumer focused proposition.
1. Transparent and competitive fee structures
2. Stability and peace of mind by being located in a jurisdiction that is steadfast in turbulent times
3. Open architecture investment choice, giving advisers an unbiased and comprehensive international multi-currency investment universe.
4. A range of Discretionary Fund Manager (DFM) options to enable advisers to outsource to professional investment specialists, where appropriate.
5. Exemplary client experience and reporting, including efficient on-boarding, secure data, and online information.
If international advisers find an investment platform which excels in these five areas, we believe they will have identified a sustainable partner to work together with them in developing their total value proposition to clients.
By Antony Kelsey, Head of Business Development, Capital International Group