Consumer Panel calls for effective competition and a rebate ban in Platforms

Platforms, as on-line resources for buying, selling and administering investment portfolios are becoming increasingly important to consumers and financial advisers alike with the potential market estimated at £2 trillion.

The Consumer Panel called for more work by the FSA on platforms, stronger action on promoting effective competition and for the abolition of rebates. In order to inform the debate on Platforms the Panel commissioned the Bluerock strategic consultancy to carry out the research published today.

Adam Phillips, Chair of the Consumer Panel said:

''The FSA must act now to ensure that the Platforms market develops in the interests of consumers. Given the potential future size and importance of Platforms we want to see the FSA exercise greater scrutiny on how best they should be regulated. We hope that the research we have commissioned from Bluerock will play a valuable role in starting a wider regulatory debate on Platforms.

The Panel has long campaigned for the elimination of product, provider or sales bias in the retail distribution space. There has to be transparency and clarity over relationships and charges and therefore there needs to be a ban on rebates.

It is essential that there is effective competition between product providers and among platforms so that consumers get a fair deal from their investments. Platforms are an increasingly important form of retail distribution and it is crucial that the principles of the FSA's Retail Distribution Review are not compromised. We want to see a Platforms market where choice, access and value for money for consumers are critical components."

Notes to editors

1. The Consumer Panel's Platforms position paper, response to the FSA and research by Bluerock are all available on the Consumer Panel website:

   CP10/29 Platforms: Delivering the RDR and other issues for platforms and nominee-related services

   Delivering the RDR: Platforms - Consumer Panel Position Paper

   Implications of RDR Platform Proposals on Consumer Outcomes

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3. The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA Board on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
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5. The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work is available our website.
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7. There are currently fourteen members of the Panel as listed below. Panel members are appointed for a three year term which can be renewed once (For further information on individual members, see the Panel's website.