Advisers feel constrained from recommending platform transfers – new lang cat report

Andy Bell
30 April 2019

The lang cat and AJ Bell today launch a new report designed to help financial advisers facilitate platform transfers and get better deals for their clients.  The report shows:

•        Over half (56%) of advisers questioned about platform transfers feel constrained from recommending a transfer because of administrative complexity and cost


•        The relative price points of advised platforms are significant enough to warrant a transfer – over £90,000 for a 30 year investment
•        Advisers can’t avoid platform transfers because it is administratively difficult
•        COBS and PROD are both clear that advisers have to keep the relative suitability of their platform recommendations under review and transfer clients if there is a more suitable platform for their needs
•        If there are few propositional differences then price, financial strength and service should be considered

The report is free to advisers and shows the sections of the COBS and PROD sourcebooks that they need to comply with in reference to platform transfers.  

It concludes that it should be possible for advisers to create a streamlined advice process which satisfies regulatory requirements, controls risk for businesses, is understandable for clients and cost effective for everyone involved.  This would improve movement of assets between platforms and lead to greater competition in the market.

Mark Polson, founder of the lang cat, comments:

“It’s clear there are cost and process issues that are preventing transfers from working properly. However, the regs state that advisers should recommend transfers where they are in a client’s best interest. The fact the initial advice recommendation may be their primary platform that they prefer to use is neither here nor there.

“None of this is easy, and real life is rarely reflected in the pages of a market study. But we think it is possible to create a much slicker transfer process that works for everyone involved, including the regulator.

“The truth is every participant in transfers needs to work on process. It probably doesn’t take 15 or 20 hours to get one done if everyone involved plays fair and is on their game. Three to four hours might be more like it.” 

Andy Bell, chief executive at AJ Bell, comments:

“I have a lot of sympathy with advisers when it comes to platform transfers but unfortunately it is not an area where they can stick their head in the sand.  The lang cat report is essential reading for any adviser grappling with their obligations around platform transfers under the PROD and COBS rules.  It signposts the relevant sections of both sourcebooks and provides practical suggestions on how advisers could use a streamlined suitability process to facilitate bulk platform transfers.  

“I agree with the conclusion that this is an area where the regulator needs to provide more guidance for advisers but until then we are happy to sponsor this report so all advisers can get it for free.”

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