The regulator has plans to launch a platform market review in response to competition issues identified in its Asset Management Market Study published last November.
In its 2017/18 Business Plan, the Financial Conduct Authority (FCA) said it wanted to examine a number of potential competition issues in the investment platforms market as identified in the interim Asset Management Market Study.
The issues included complex charging structures, whether platforms' investment tools enabled effective choice and whether platforms had the incentives and ability to put competitive pressure on asset management charges.
The regulator wants to look at how investment platforms compete to win and retain customers. It also said it would consider whether platforms enabled retail investors to access investment products that offered 'value for money'.
In the accompanying Sector Views published alongside the business plan, the regulator indicated platforms had failed to give retail investors enough opportunity to take advantage of discounts on fund charges that their scale allowed them to receive.
This followed the findings in the Asset Management Market Study that highlighted while retail platforms were able to secure discounts on fund charges through 'economies of scale', this was not widespread practice.
The regulator argued that pricing 'clusters' in areas of the platform market were a "result of poor competition pressures exercised by the demand side".
The FCA said it would consider industry feedback to the Asset Management Market Study as part of the platform review.
It said: "The investment platform market study will allow us to understand the causes of any competition problems in this market and assess what we can do to improve competition between platforms and improve consumer outcomes."
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