Is it practical for IFAs to operate with multiple wraps?

17 June 2011 12:00 pm

There has been much debate about the use of wraps, platforms and their integration with back-office systems. There appears to be a confusing array of options for advisers.

Following Money Marketing’s recent Wrap and Platform Report, the majority of IFAs who took part in the survey are regularly using wraps and platforms. Many use a combination of at least two wraps and/or platforms.

But how practical is it for an IFA to operate multiple wraps/platforms?

Different charging structures, fund choices and product functionality mean complexity for clients and which client segment “qualifies” for which wrap or platform? The delivery of a client-service-led proposition will be a key factor in advisers earning ongoing remuneration. How simple will this be to deliver if a client were to hold multiple plans on multiple platforms? The solution may be to use just one provider but if that provider should fail a due diligence assessment, then how easy is it to change and what will be the impact?

As Fraser Donaldson of Defaqto highlighted, the main points to consider on due diligence are - flexibility, service, financial strength/ viability, cost, charging structure and product/ investment vehicle choice. All these can change instantly.

At IntelliFlo, we see a backoffice system acting as the central hub to help with an advisory firm’s service, with wraps and platforms alongside hosting the relevant tax and investment wrappers. There is a desire from advisers for continued integration between wraps, platforms and back-office/planning software. Adviser firms we are in discussions with state the more integration there is the more time can be saved. This is at the forefront of our development strategy. We believe these developments will ensure control of an adviser’s business remains with the adviser.

Using multiple wraps and platforms within one business can have advantages for clients but will cause usability issues for staff. How does an IFA business deliver an efficient service? Ideally, you want each provider to be synchronised and integrated with the back-office system. This extends well beyond the valuation and commission integrations prevalent in the industry. Advisers should also be conducting due diligence on their back-office software provider as well as their wraps and platforms.

Even within this market, there is a multitude of different offerings from web-based to desktop, each with their own functional links with providers among other areas.

Advisory practices need to ensure they have the correct technology to deliver a profitable service proposition to all their clients.

Nick Eatock is chief executive officer at IntelliFlo

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