In its Investment Platforms Market Study Terms of Reference (MS17/1.1), the FCA said the platform market, which has grown from £108bn in 2008 to £500bn in 2016, was becoming "increasingly vertically integrated", with commercial relationships existing between platforms, asset managers, discretionary investment managers and financial advisers.
Product suitability will also make it into the FCA scope of analysis, looking at whether platforms' risk profiling tools match investors to a portfolio mirroring clients' risk level.
In either case, the FCA argued, it was likely an adviser's preferences would be a key determinant in the selection of the platform and the study would therefore explore the impact this has on competition between platforms by exploring the question "Do adviser platforms compete in the interests of the end-investor?"
"We will assess whether investors and advisers can assess the value for money of investment propositions, including investment products and platform services, from the information platforms make available", the FCA said in a statement on Monday (17 July).
"We will explore what factors advisers prioritise when choosing, reviewing and deciding whether to switch platform, and whether platforms consider the end-investor when competing to win business from advisers", the FCA said.
To provide investors access to retail investment products and information about these products, platforms interact with other platforms, advisers, asset managers and fund ratings providers.
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The regulator also expressed concern "consumer harm may arise if the interests and choices of the adviser and investor are not aligned".
"In principle, platforms allow retail investors to pool their money and achieve better investment returns", it continued.
This market study follows on from the asset management market final report, published last month, which highlighted a number of potential competition issues in the platforms sector.
It added: "These relationships have the potential to distort competition by encouraging platforms to compete in the interests of those with which they have commercial relationships rather than in the interests of the consumer".
'Platforms have the potential to generate significant benefits for consumers and we want to ensure consumers are receiving these benefits in practice, ' he said.
The FCA's deadline for feedback is 8 September.
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