Ultimately a customer could ask for a withdrawal at any time and as such advisers will need to think carefully about any issues with accessing assets. However, these migrations can be fraught with serious difficulties and result in an inability to report incorrect information to clients and consequently see a material drop in service levels.
Now this does not mean a platform switch is necessarily the answer, however as a minimum, advisers will need to evidence their consideration of foreseeable harm and demonstrate alternative options have been considered.
Legacy assets with sub-optimal investment solutions
Legacy assets can sometimes be more difficult to service, but the FCA will expect these to produce similarly good outcomes as those assets that are more actively serviced.
Failing to align these assets to an adviser’s core centralised investment proposition, except where there are clear barriers to doing so, could cause the FCA to determine an adviser is prioritising the interests of new customers over existing ones. The question is what represents a clear barrier.
With the FCA keen to facilitate competition and asset transfers, it seems unlikely that the effort of having to move between platforms will be sufficient. Many adviser businesses may decide that now is the time to move clients from legacy platforms.
All advisers should make sure they can identify these clients and have documented the reasoning for them not being offered the core CIP solution.
This also drives at platform selection. To avoid groups of clients being disadvantaged, adviser businesses should choose a platform provider that offers the breadth that will allow the maximum number of client needs to be successfully met while benefitting from their core CIP.
Long tail client books
Assessment of value, the cost of living crisis and an increased number of and focus on vulnerable customers may mean that there are customers that are no longer cost-effective to service.
Just as they need to make sure they know what investment solution they are in, advisers need to be going through their client book and reflecting on whether there are some who are paying fees but not receiving sufficient service to justify them.
Advisers would be doing well to shine the spotlight on their filing cabinets as they could be filled with risks they previously did not know about.
It is likely that the regulator is going to be hot on this going forward, so the sooner this can be done, the sooner advisers can put their laser focus back on building strong, long-lasting relationships.
David Tiller is commercial and propositions director at Quilter
