Platform providers have been forced to defend themselves following criticism from the IMA they are not passing on key fund information to advisers and their clients effectively.
In a recent report, the IMA said the fund marketplace is becoming increasingly "complex" and "intermediated" leading to concerns as to how much information is getting through to clients.
It states: "This increasing distance between managers and retail investors has led to some concerns over whether material devised for those investors is actually transmitted to them.
"Managers are reliant upon the platforms and other intermediaries to pass on fund material to the investors.
"The current market conditions led to situations where managers wished to communicate additional, timely messages to investors, but it became increasingly clear platforms were unable to administer this activity and messages were not being delivered directly to investors."
A spokesperson for the IMA says the issue has been repeatedly raised by fund groups and the report's working group of 11 industry representatives agreed it was an issue which needed to be resolved.
It says it has made recommendations on the facilitation of information and has begun to consult with platforms.
However, David Ferguson, chief executive of Nucleus, says the relevant information is already being provided to customers and is easily available on both platforms' and fund groups' websites.
"If they do not have it they should be asking for it. We are not talking about information being hidden deep in the ground," he says.
Peter Hicks, Fidelity's head of UK retail, adds platforms are worried about drowning clients with too much information.
"If you have 64 providers on the platform, do you deluge the investor with information from all the providers?
"The more formal communications like factsheets and manager reports are all available on the platform site anyway," he says.
Hicks adds even during a time of financial turbulence last year, FundsNetwork was not being inundated with requests from managers to distribute information.
He concludes the most important thing is for fund groups to arm advisers with the necessary information because they are likely to be the first place investors go to with questions.
Recommendations from the IMA include:
- The industry should consider with representatives of the supermarket and wrap community the facilitation of information for investors, with a view to recommending rule changes, as appropriate
- IMA should consult managers on the drawing up of industry guidelines on the production of fund literature for professional investors
Source: IMA report: The Credit Crunch, A stress test for UK Authorized Funds
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