FSA presses platforms to explain their value

The FSA’s understanding of the platform industry has again been called into question after it sent an “odd” questionnaire to operators quizzing them on their relationship with fund managers.

The questionnaire asked platform providers about the value they provide to the fund management community.

It is part of the regulator's ongoing research on platform remuneration ahead of a likely ban on both fund manager and cash rebates. 

One industry figure said the questionnaire was "odd" and "confusing" and highlighted the watchdog's thin understanding of platform-related issues.

"The underlying issue is the FSA does not fully understanding what is going on," said the insider.

"We thought the question about what value platforms add to fund managers was particularly odd. We are all a bit confused and I think there will be a lot of frustration from the industry in the early part of the new year."

The regulator is receiving conflicting messages from different segments of the industry, he said.

"I think a lot of these issues relate to people trying to protect a legacy position which is intellectually unsustainable."

Another figure echoed the sense of confusion arising from the questionnaire.

"We have been trying to work out exactly what it means so we are going to have to make some assumptions and send it back," he said.

The latest development in the FSA's ongoing probe of the platform industry comes after IFAonline revealed the watchdog deployed the services of Big Four Accountancy firm Deloitte to help with its research into platform rebates.

The revelation raised concerns over both the cost of the FSA's research and its understanding of the platform market.