Mention a song title and a tune or lyrics will instantly spring to your mind. For you, it’s the most natural thing in the world. But perception differs. The song I think of might be quite different to the one you think of. Such is the nature of consciousness. You can’t fight it.
The lang cat’s newly launched white paper is called; it’s all about you: tackling your PS13/1 due diligence requirement’s. Which means that I’ve spent rather a lot of time with McFly playing on a loop inside my head. Please don’t judge me, I’ve suffered enough. But might there be a different tune on someone else’s loop? It seems so. By the power of Google I unearthed songs by Luther Vandross, 2Pac and Gospel group Mountain Movers.
A similar concept (but without the lyrics you’d be embarrassed for your Mum to hear) applies to the FCA’s Policy Statement 13/1: Payments to platform service providers and cash rebates from providers to consumers. In particular we’re talking about the requirements around platform remuneration and product bias (COBS 6.1E.9 and COBS 6.1F.1 respectively) which make it very clear that, while there are rules that platform providers are expected to follow, the onus is squarely on the adviser firm to satisfy itself and ultimately the FCA that the platform(s) with which they choose to do business are playing by the rules.
At the most basic level, this is about treating customers fairly and acting in their best interests which can only ever be a good thing. But, it is yet another layer of due diligence and is further complicated by ambiguity; both in terms of some of the meaning and the FCA’s expectations of what advisers should do and how.
Enough gloom. Clearly we’re going somewhere with this and here it is!
COBS 6.1E.9 and COBS 6.1F.1 featured in the lang cat’s September 2013 Guide to Platform Pricing along with some suggested questions that we thought might help meet the requirements. We got some feedback that this seemed like a sensible starting point so, being generous felines, we’ve taken it a bit further in our white paper which discusses the issues and our suggested approach.
We propose a two stage process, each involving a set of questions. First there are basic questions to ask of your platform provider. We believe that these alone are unlikely to satisfy the FCA’s assessment requirements so we reinforce the belt with a stout set of braces; a set of questions to ask yourself based on your experience with your chosen platform provider or providers.
By being clear on the questions that you ask (and what the answers mean to you) and by using them consistently across platform providers, we are one step closer to everyone taking the same meaning from the same questions and one step closer to consistent and comparable due diligence, on this narrow point at least.
We’ve no doubt that there are other approaches out there and we want to hear about them so we’re opening up the floor for debate, suggestions, contradictions, general grumbles and other such pearls of wisdom. Details of how you can have your say are in the paper. Which you have already downloaded. Yes?
Knowledge is power and we plan to harness that, by not only passing a summary of feedback to the FCA but also building a PS13/1 resource on this site. We’ll be asking platform providers for their answers to the questions and these will be made available here. Then we’ll do the same with advisers and build the resource as we go. It’ll be a one stop point for assessing platforms based on their own words, and later, the experience of peers.
Let’s see if we can’t come to some agreement on what the requirements mean as well as the best way of addressing them. Or even better, by sharing different views we might end up somewhere we never would have considered. Either way we want to hear from you. After all, it is all about you, and that we can agree on.
