Is it a Wrap or is it a Platform?

Is it a Wrap or is it a Platform?

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Way back in 2015 we were struggling with issues in the industry’s Wrap & Platform Policy Council, many of which are similar to today’s challenges and current issues facing investment platforms.

Wow – remember when we used to argue of what constituted a wrap and the differences to a platform!

The platform sector has grown rapidly over recent years and is likely to continue in this way. You will know the FCA has intense focus on ensuring that the very highest of standards apply in an environment where consumers can invest with confidence, understand the risks they face and are clear about the availability of regulatory protections if things go wrong.? We have also had long concerns about the “Advice & Guidance” borders.

In addition, Quantum computing has emerged promising unprecedented computational power by leveraging the principles of quantum mechanics. Within the realm of quantum computing, two primary approaches have gained prominence:?analog?quantum computers and?digital?quantum computers. Given the emergence of this alongside Generative AI, current development of investment platforms will have a number of challenges to face.

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A “platform” is a simple concept. It is a tool to provide access to investment products through an online portal. The immediate challenges currently would seem to be -

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• Implementation of Consumer Duty requiring firms to deliver good outcomes for retail customers. Fees and charges represent fair value and are appropriately disclosed whilst customers are adequately informed of risks, and that platform transfer times are reasonable and in line with market norms. Not sure we have ever agreed industry standards, despite the efforts of the Wrap & Platform Policy Council and other industry groups.
• The FCA will expect to see evidence of adequate investment in?business continuity?including in technology and operations so that downtime and outages, which could risk harm to consumers and impact negatively on market confidence, are minimal.

• Firms should offer robust protection to customer data and assets in an environment where the threat of?cyber-attacks?and?financial crime?is ever increasing.
• The FCA will expect firms to demonstrate an awareness of the current and ever-changing?economic environment – especially around cash hence the latest Dear CEO letter -

https://www.fca.org.uk/publication/correspondence/dear-ceo-letter-retention-interest-earned-customers-cash-balances.pdf

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FCA will be continuing to sample firms through 2024 to assess systems and controls – so will be interesting to see how platforms develop over the next 18 months.

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