More than two thirds of advisers could be in breach of TCF as a result of the way they transfer clients onto a wrap platform, new research suggests.
Pensions software provider Dunstan Thomas says advisers could fall foul of the regulator by migrating specific groups of clients onto a wrap rather than advising them all on its pros and cons.
According to its research, around half (52 per cent) of clients are actively revisiting selected clients to assess whether to move them into a platform.
Only 19 per cent are revisiting all their clients to assess whether to move them onto a platform, while just four per cent are actively moving all clients together.
Dunstan Thomas chairman Chris Read says: “More than two thirds of adviser firms (71 per cent) may be in breach of TCF by selecting specific groups of customers for migration to wrap rather than explaining the pros and cons of wrap to all customers and helping them to make the right decision for them.”
Research by Dunstan Thomas also reveals just one in ten product providers believe wrap platforms are their key route to growth this year.
In a poll of 183 life offices, Sipp providers and administrators, the firm discovered that a third (35 per cent) have adopted a “wait and see” approach on entering the wrap market, while just 6 per cent have bought a stake in a key wrap platform.
Around one in five (18 per cent) are building their own wrap platforms.
The research also found a fifth intend to take advantage of the turbulent market to acquire or partner. However just 16 per cent of providers are looking to develop new products this year.