A brief introduction to Wraps and Platforms

Tuesday, 2nd June 2009 09:04 - by Resident IFA

Put simply, ‘Wraps’ is another term to describe how you can have access to all your financial products in one online place. It has most relevance for products such as Pensions and Investments. The rise of Wraps is a logical movement by the financial services industry, allowing you not only to view your products in one place, but also to access many different investment fund management companies. If you cast your mind back only a decade, if you requested final advice that included some form of investment fund content, it was likely that you would have 'Hobson's choice', with only the internally-managed funds of one provider to choose from. If you wanted another investment house’s funds, you had to take out a separate product. Since then, the rise of ‘Platforms’ has allowed access to different investment fund manager’s funds though the one place. Some platforms have more funds than others, but it is not uncommon for a platform to offer in excess of 1,000 funds nowadays. Notable players in this market are such as Cofunds, Selestia, Fidelity, Transact, and so on. So, you can head off to a ‘platform’ to have a wide choice of investment funds and then ‘wrap’ all your products (i.e. Pensions, Investments, etc.) together for ease of administration, analysis, and reporting. This all sounds great, doesn’t it? I have to say ‘Yes’ overall, but I do have my reservations. A Wrap or Platform is a financial product in its own right – How do you assess the product on day 1? How do you know it is still as good 2 years down the line? Is it the best all-round Wrap, or do you need one for your Pension and one for your Investments? (Defeating the object?!). As an Adviser, I have reservations on a professional level. I would like to use only one Platform, but still research them from scratch each time for every single Client, each having their different needs. This has led me to recommend at least 3 different Wrap/Platform providers to my Clients within the last year. This in itself does not lessen the work I do and still leaves me short of the utopian vision of a ‘one-size-fits-all’ product. I am attending a Conference over the next two days which aims to discuss, educate about, and demystify Wraps/Platforms. I am not one who enjoys attending conferences and seminars for the sake of it. There are so many in the IFA (Independent Financial Adviser) profession, that I really try hard to pick the odd one that looks as though it will provide real education and benefit to me and, in turn, my Clients. To this end, I believe it is time to get a firm grip on where my company wants to go with Wraps/Platforms and how any radical changes will be implemented to give most benefit and least upheaval for my Clients. The seminar website ‘blurb’ contains, among other questions, “Is your firm ready to: Support your Clients with technology that allows you, and them, to get a transparent view of their portfolios in an instant?” and “Leverage technology in order to spend more time with Clients and develop business?” Well, yes I am. I hope to find my utopian vision realised over the next 2 days, but I am not holding my breath that such revelations happen in such a short time...and in a Hotel in London! Until next time...