The Financial Conduct Authority (FCA) is being urged to include an 'opt out' clause for clients when platforms begin switching clients to 'clean' funds en masse.
Aviva UK head of platform proposition Phil Ralli says the regulator should consider allowing platforms to offer an ‘opt out' approach when it comes to share class migration.
Platforms currently have until April 2014 to switch new business to a more transparent, unbundled charging structure, and until 2016 to do the same for existing business.
The FCA has not yet clarified the exact information process which will be required in order to switch clients to a new charging structure.
After a client has been made aware of the changes, permitting an ‘opt out' approach, in cases where the net cost to the client is unchanged, would pave the way for bulk transfers to the new charging structure, Ralli said.
"We have only ever offered adviser charging but our view is giving the client the opportunity to opt out should be an option for platforms," he said. "That is something which would typically be supported by advisers.
"They would expect to have conversations with their existing clients so they understand a move is taking place but there is no change to the cost or the level of risk. They would not necessarily expect to go through a very detailed advice process that is going to cost everybody money.
"The FCA needs to clarify how the process will work in terms of the information clients will receive. That is the key issue. Rather than having to restate all the information, which may still be consistent with the holdings they have, it might be better to give an opportunity to explain what has changed and why."
Aviva announced in March plans to combine its wrap platform and legacy business into one online system, in a bid to accelerate wrap growth, streamline the service provided to advisers and ease the migration of life business.
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