Post RDR, many consumers faced with the prospect of significant advice charges have now begun to research and educate themselves on financial products. According to Altus consultants, FCA retail sales regulations don’t work well in this D2C context, having been designed for a world where advisers were paid for selling products and bias was the big concern.
With the abolition of commission payments as a result of the RDR, a continued obsession with the definition of advice when designing propositions is misplaced according to Altus. Instead platforms should focus on ‘consumer experience’ and engagement which, according to research highlighted in the white paper, is an area where financial services companies are well behind the curve compared with other sectors.
Kevin Okell, Consultancy Director at Altus, believes the winners and losers of the D2C platform market over the next few years will be defined by their ability to apply innovative technology to develop an engaging and enduring relationship with consumers which should take precedence over compliance with regulatory guidance that has not yet been adapted to keep abreast of industry developments.
Okell says:
"The real winners in this world will be providers who look outside of the financial services sector for inspiration. The retail, grocery and telecommunications industries are already managing to harness the art of consumer-centric business modelling very nicely, which is why our industry could learn a thing or two from the way these sectors are operating."
Commenting on the white paper, Mark Polson of specialist platforms consultancy the lang cat said:
“We’ve already seen some areas in which the direct platforms space is starting to stretch away from its advised cousin. In just a few weeks since Hargreaves Lansdown announced its charging structure we’ve seen considerable pricing innovation, and a real focus on what it is that platforms can do for investors over and above pure custody, dealing and administration. Now it’s time for the sector to make its kit a pleasure to use and to interact with. Altus’ report is well timed and gets to the heart of the issue – all the functionality in the world is meaningless if you need a degree to use it.”
