He said the FSA presumes RDR is going to drive costs down for the consumer accessing advice or using an execution-only broker, but the unbundling of charging structures is actually likely to send prices climbing.
Hargreaves Lansdown contacted investors at the tail end of last week to inform them it would be amending the charges to some of its funds within the Vantage Service.
The changes will affect mostly tracker funds and will see the AMC of 0.5% replaced with a flat fee of £1 or £2 per month, depending on how much the fund house rebates to Hargreaves Lansdown.
The company said it will remain free to hold 97% (or more than 2,400) of funds in the Vantage service, but the new platform fee would come into effect on 31 December in a bid to "help us continue in our aim of providing our clients with the widest range of investments and the best value".
If Hargreaves Lansdown, as the largest and dominant direct-to-consumer platform, is feeling the need to push costs up, McDermott said he would not be surprised if other platforms followed suit.
He added that Chelsea Financial Services did not have any immediate plans to change its charging structure, but would be looking very closely at its options post-RDR.
"We are considering it deeply as to what way we will look post-RDR. At the moment we will continue to offer our clients 150bps, which includes the platform fee and our fee.
"Hargreaves Lansdown is a business and can charge whatever it thinks it can charge, given its market leading position it obviously thinks it can do it," he concluded.
