Wraps slate 'pointless' FSA consumer rebate research

Wrap platforms Ascentric and Transact have criticised the FSA after it requested the wraps provide it with details of hundreds of their customers in order to gauge their views on platform rebates.

In August's platform policy statement (PS 11/9), the regulator said its research into a ban on fund manager and cash rebates would include an examination of how platforms interact with consumers.

As part of this research, the watchdog asked Transact to provide it with a list of 150 end investors drawn at random from its client base. It said it would quiz them on issues including rebates.

But head of marketing Malcolm Murray (pictured) said the move was a waste of money.

"Most clients will be very puzzled to be asked what their views are on cash rebates," he said. "If you ask the man on the street the difference between a fund supermarket and wrap, he or she would not have a clue - and that issue is fundamental to the whole debate around rebates."

The wrap wrote to advisers informing them it had been required by the FSA to provide it with the names and addresses of their clients for the purposes of the research.

But because names were drawn at random, some of the consumers on the list included a 98-year old suffering from dementia and a well-known pop star who is rarely in the country, according to Murray.

"Some advisers rang back saying ‘get that name off the list'," he said.

Ascentric managing director Hugo Thorman said it is "naive" of the regulator to assume end consumers have a grasp of platform mechanics.

"The FSA will find out the consumer does not understand these issues," he said. "The reason customers get an adviser is because they do not want to understand this stuff so gauging their views is absolutely pointless."

The FSA said: "The reason we are speaking to consumers is to find out how they use platforms, indeed whether they use platforms, or whether interaction is through an adviser."