Weighing in at 91 pages and backed by a study of more than 3,000 platform users, the consumer research element of the FCA’s Investment Platforms Market Study (IPMS[1]) is a heavyweight. And while it doesn’t land many blows or produce anything particularly revelatory, NMG’s research provides a substantial body of qualitative and quantitative evidence around consumer behaviour and platforms that previously we didn’t have.


There are a few caveats to keep in mind when weighing up the findings. One is that, as NMG points out, consumer sentiment around investments is likely influenced to some extent by the positive returns of recent years. Another is that mixed levels of awareness (i.e. of charges and what platforms do) make it difficult to accurately judge how much weight can be attached to responses around experience, satisfaction and expectations.

The consumer research also underlines (very firmly and in a good bold font) how different the advised and non-advised segments are. Which begs the question (and this has been bandied about lang cat HQ at length) as to why the FCA has lumped two completely different markets together in one paper.

Anyway, that all said, here are some highlights.


Issues with platforms must be significant and sustained to prompt a switch, given the perceived work involved in switching and behavioral barriers such as inertia.

Users that have switched cite lower charges as a key motivation. While people aren’t generally driven to switch by poor experience, the most likely exceptions are continued experience of the biggest frustrations – unresponsive customer service, poor administration and delays in transactions.


Only a third of users picked out charges as being important in platform selection – but dig deeper and one (very familiar) reason for this becomes clear: our old friend, lack of clarity.

A fifth of platform users don’t know whether they pay for investing through their platform and a further 10% (lower among advised respondents) don’t think they pay any charges. Of those who know they are paying charges, less than half (48% non-advised; 46% advised) believe they are paying an ongoing platform charge. Some of the qualitative research interviewees confused advice fees, product wrapper charges, ongoing fund management charges and platform charges. There is an issue with perceived lack of visibility and comparability of charges, with few recalling their platform sending out any recent information about charging.

The difficulty of comparing different price structures is given by some as the reason they didn’t see charges as an influential factor when choosing their platform (and also explains why discounts and offers might have less of an impact than providers believe). As NMG comments, there is a clear correlation between clarity of charges and their importance as a differentiating factor.


NMG noted that platform selection is often seen as a ‘second-order’ decision when compared to product or investment strategy choice. Advised respondents in particular often defaulted to talking about products rather than their platform.

Non-advised users often spend more time and effort choosing investments than on selecting the platform. Almost 40% of those doing their own research use information provided by the platform, but usually alongside third-party sources such as specialist websites and financial press (seen as trustworthy and impartial). Less confident non-advised investors are more likely to rely on platform content to guide their investment choices. These investors are also more likely to use ‘best buy’ fund lists in their research, although a minority of non-advised investors are sceptical – rightly, in our view – about the relationship between those funds and the platform.


While 17% of non-advised platform investors – typically the less confident, less experienced cohort – use model portfolios, plenty remain unconvinced of their merits. Lack of flexibility, risk of pigeon-holing, lack of enjoyment, lack of clarity, lack of need and concerns about cost were all cited as objections to using model portfolios.

On the plus side, they are liked for reasons of speed, ease and simplicity, hence their greater popularity among those who are less knowledgeable, more time pressured and with no great desire to engage with their portfolio.

Advised users rarely know whether they are in a model portfolio, a packaged fund solution (e.g. multi-manager fund) or a bespoke portfolio created by their adviser. Nor do they particularly care – all that matters is performance.


As in the Asset Management Market Study and the Retirement Outcomes Review, one clear theme is that there are obstacles to more effective consumer engagement with the industry. Many are the responsibility of the industry, not least the perennial issue of charges clarity.

It’s unfortunate, then, that the FCA remains fixated on shopping around and switching. As the Financial Services Consumer Panel said a year ago, ‘The fiction that consumers can and will drive competition has persisted too long’[2].

Whatever your feelings about the merits of the overall report, if you’re a platform provider, adviser, asset manager or have any kind of interest in understanding how consumers perceive, understand and engage with platforms, the consumer research annex is well worth a read.

[1] Among the tricks missed by the FCA was not calling it Investment Market Platform Study.

[2] https://www.fs-cp.org.uk/press-release-dont-rely-consumers-boost-competition-says-panel