LONDON (Reuters) – Investment platforms must show clearly how they select, monitor and deselect funds from the lists of recommendations they market to customers, Britain’s markets watchdog said on Thursday.

Investment platforms came under scrutiny in June when the flagship equities fund of Neil Woodford, marketed as a star stockpicker, was suspended after failing to meet redemption requests from investors.

Firms recommending funds must do so impartially, clearly identifying and managing any conflicts such as when funds offer discounts to platforms or where there is a lack of independent research to verify performance, the Financial Conduct Authority said in a letter to chief executives of investment platforms.

“Processes for clear selection, monitoring and deselection of funds on lists should be documented, understood and followed.”

The suspension of Neil Woodford’s fund hit around 300,000 customers of investment platform Hargreaves Lansdown (HRGV.L). The Woodford fund had appeared on Hargreaves’ “Best Buy” list right until its suspension.

Last March the FCA set out a package of measures to help investors switch between investment platforms to increase competition.

“We will review progress in 2022 and will consider taking forward further action if consumers’ experience of the switching process does not continue to improve,” the FCA said in its letter on Thursday.

In December the FCA delayed a public consultation on possible curbs on exit fees until the first quarter of 2020.

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