Aussie wrap firm raises conflict concern

20 July 2006

Australian wrap provider Praemium says IFA-owned wraps such as Ascentric and Nucleus could produce a conflict of interest in the way partner firms deal with clients.

But both platforms have hit back, saying the comments show an ignorance of the UK market.

Praemium managing director Arthur Naoumidis says: "We would be concerned if we were the regulator about the set-up of recently announced IFA-owned wraps and whether they will always act in the clients' best interests."

Ascentric managing director Hugo Thorman says the firm has had detailed discussions with the FSA and partner firms will disclose information to clients.

He says: "This shows a lack of understanding of the UK market, which is very different to Australia. We have discussed this with the FSA which is happy with the set-up and our advisers will disclose that they own an equity stake."

Nucleus chief executive David Ferguson says the point of the venture is to align adviser and client interests and there will be full transparency.