Out-Law News | 30 Oct 2014 | 3:53 pm | 1 min. read
Insurance law expert Bruno Geiringer of Pinsent Masons, the law firm behind Out-Law.com, said collaboration by the new UK Platforms Group can help platforms to protect their business models.
"It is important that the platforms industry does not set itself up apart from the rest of the industry and rather integrates itself within it," Geiringer said. "We would like to see this new body develop close links with other more well-established bodies and not act in competition with them."
"Platforms are just a means to an end and are dependent on two singularly important features: a narrow group of system providers and the provision of products to sell. These are inherent risks for platforms that do need to be managed across the board. There will be others. And the worry is what happens if a platform or system provider collapses and whether the capital adequacy rules will operate to protect customers' investments," he said.
"We would like to see the platforms industry grow into the distribution channel of choice in the new digital world but in harmony with existing routes to market such as advisers and product providers," Geiringer said.
The new UK Platforms Group represents 28 platforms which between them account for 95% of the UK platforms market. Members include Cofunds, Hargreaves Lansdown and Old Mutual Wealth.
The group said it will "aim to work proactively with bodies such as the FCA and Treasury, tackling issues pertaining to regulation, tax, savings policy and consumer issues" and would also "focus on driving market best practice, identifying ways in which platforms can work more efficiently and effectively for their customers".
Head of business development at Fidelity Woldwide Investment, Ed Dymott, has been appointed chairman of the new group.
"The platform market is now a major part of the UK savings landscape, representing millions of investors, a significant proportion of the advisory market, and is approaching £500bn of assets," Dymott said. "However, there are industry issues which could benefit from greater collaboration between providers, to ensure that customer outcomes can continually improve and that we drive efficiencies within the market."