The FSA is continuing to recommend that advisers use multiple wrap platforms as part of its clarification on platform use.
Speaking at the events firm Dealer’s Group IFA wrap and platform debate 2006 in London last week, retail policy consultant Katharine King, who is leading the FSA’s review of wrap, said the regulator did not want to introduce rigid rules on its use.
King said the FSA will offer guidance and recommend that advisers use multiple wraps as best practice and disclose the charges transparently. This would enable advisers to ensure that they can offer the best service to all clients and best suits advisers using the independent tag.
She said the 20 per cent reporting rule, which meant that advisers placing more than 20 per cent or more of a client’s assets in a single product or fund had to disclose this, has been removed so it will not be a hindrance to wrap.
King said it was better that IFAs put a big amount of cli-ent business on a single platform because it was right for those clients than putting 19.9 per cent on it and deliberately go elsewhere to try to please the regulator.
She says: “We are still getting a fair number of questions from advisers on wrap. We will be doing further work on wrap but it is not decided exactly what format it will take. It will not be rules based. We sometimes find that by saying nothing, we can have as much impact as putting out a formal statement without the room for misinterpretation.”
Informed Choice managing director Nick Bamford says: “It seems to clarify things fairly well. If using the wrap will advantage your client and the charges are properly disclosed, they do not seem to have a problem with it.”