The Financial Conduct Authority (FCA) will look at the 'barriers' to platforms developing advice as part of its market study.
One of the issues listed by the regulator in the terms of reference for its study of the platform market is regulatory barriers to competition for platforms.
The FCA said one of its specific concerns was around how much help platforms could offer clients.
'We want to understand whether there are barriers preventing platforms developing advice propositions,’ it said.
Mary Starks, director of competition and chief economist at the FCA said this would involve looking at the difference between guidance and regulated advice, an issue raised last year in the financial advice market review (FAMR).
‘There is a well-known set of issues around the borderline between advice and execution only that was raised in FAMR - the issues that automated businesses have in developing propositions that are as helpful as they can possibly be to their clients without tipping over into regulated advice,' she said.
‘The issue keeps coming up and being raised with us and we are looking to hear what people have to say about it a couple of years on from FAMR.'
She referenced a recent study by management consultancy Deloitte which showed there was still a lack of clarity in this area.
‘There was a Deloitte report recently about this that described a set of business models that were clearly execution-only and another set that were clearly providing advice and a slightly less clear space in the middle,’ Starks said.
The issue of offering help to clients was raised by one of the largest platform businesses in its response to the terms of reference. Tom McPhail, head of policy at direct to consumer giant Hargreaves Lansdown, said investors needed extra support when making decisions.
'The advice gap remains and platforms have an important role to play in delivering guidance and support to investors, many of whom need help if they are to invest with confidence,' he said.
Other areas the terms of reference document lays out as a focus for the study are adviser charges in relation to their choice of platform and whether the concentrated technology provider market is producing barriers to challenger platforms.