From January 2013, the cost of advice will be decided by the client and adviser – not the adviser and product provider, as was the case - and can no longer be hidden from the customer in the cost of the product. Additionally, advisers will offer either independent advice which is free from restrictions or bias and which reviews the market comprehensively – or alternatively, restricted advice, having to explain the customer the nature of the restriction to their customer.

The proposals set out in today’s paper reflect the important role that platforms already play in the retail investment market, and potentially important role in helping advisers to deliver advice to consumers in a post- commission world.

The main proposals:

• prevent product providers from making payments that advisers could use to disguise the charge the customer is paying for advice, and which could influence advisers in recommending one product over another. Allowing such payments could totally undermine what we have set out to achieve for consumers by removing commission bias and could leave product charges at an artificially high level;

• ensure platforms allow their customers to transfer their investments elsewhere without having to cash them in first – a practice which can result in losses; 

• requiring platforms to be upfront about the income they receive from fund managers or product providers. This will make it easier for advisers and consumers to compare different types of platform and the services provided;

• make sure that customers who invest in funds through platforms are provided with information about the fund from their fund managers, and maintain their voting rights.

Sheila Nicoll, the FSA’s director of conduct policy, said: "Platforms are an increasingly significant feature of the retail investment market, and they have benefited customers and advisers alike"."When the market opens for business in January 2013, the platform services used by advisers and customers must be able to deliver services that are consistent with the aims and objectives of the RDR. They will need to be ready to support a market where commission bias no longer exists and the myth of free advice is dispelled."

Press release