Client’s best interests rule and using a platform service
A firm that:
• Arranges for retail clients to buy retail investment products or makes personal recommendations to retail clients in relation to retail investment products; and
• Uses a platform service for that purpose
Must take reasonable steps to ensure that it uses a platform service that presents its retail investment products without bias.
Using a platform service when advising
A firm must not use a platform service as part of a personal recommendation to a retail client in relation to a retail investment product unless it has satisfied itself that the platform service provider, and its associates, only receive remuneration for business carried on in the UK which is permitted by the rules.
Distinguishing platform charges from product charges and adviser charges
A platform service provider must not arrange for a retail client to buy a retail investment product if:
• The platform service provider’s charges are presented in a way that offsets or may appear to offset any product charges or adviser charges that are payable by the retail client; or
• The product’s charges or other payments are maintained by the retail investment product provider at a level such that a cash rebate, other than a cash rebate permitted by Cobs, is payable to the retail client.
Providing additional units or payment in cash to a retail client
The Cobs rules does not prevent a platform service provider receiving a share of an annual management charge from an authorised fund manager if the platform service provider passes that share on to the retail client in the form of:
• Additional units; or
• Cash, provided that it does not offset or appear to offset any adviser charges or platform charges.
Source: FCA Policy Statement PS13/1
