Fresh inquiries by the Financial Conduct Authority into the booming direct-to-consumer (D2C) platform industry have sparked a heated debate about the transparency and value provided by the so-called fund supermarkets.
Critics of platforms such as mega D2C firm Hargreaves Lansdown, have argued that these organisations are blurring the lines between distributor and asset manager.
Eventually, Fisher thinks the UK regulator’s and clients’ demands for greater transparency around fees and value creation will push retail platforms into a more institutional direction in the long term.
Fisher’s firm Multrees is by his own admission “quasi-institutional”, providing custodian, investment administration and consolidated reporting services for high net worth clients of private investment offices, multi-family offices and private client arms of larger global institutions.
“From our perspective, it’s a really interesting time out there,” said Fisher.
“A lot of retail investment platforms have invested a lot of money to build up their platform capabilities. I question slightly whether or not that has gone more into the products proposition and the best-buy list proposition, as opposed to the customer experience.”
By contrast, the institutional end of the market has become more transparent over time because of intense competition between firms and the sophisticated client demands.
“If you look at our counterparts in the retail platform market, in order to help their clients and IFAs, they have provided products, they have put together recommended lists, they have negotiated terms with distributors and fund manufacturers. We’ve never had to do that and never wanted to do that.
“The end of the market we play in has always been quite competitive because it is quasi-institutional. By the time you get to the size of the account of the clients we service on our platform, the clients are much more sophisticated and are much more able to analyse what they are paying for and who they are paying for.”
