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Advisers warned over mass migration on to platforms

Over two-thirds of advisers could be breaching treating customers fairly principles when they transfer clients on to a wrap platform, claims pension software provider Dunstan Thomas.

Based on its poll of nearly 4,000 firms, the provider suggests that advisers could fall foul of FSA regulations by migrating specific groups of clients en masse to a wrap rather than advising them individually.

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.”

The survey shows that 52 per cent of advisers are act-ively revisiting selected clients to assess whether to move them on to a platform.

This compares with 19 per cent of advisers who are revisiting all their clients to assess whether to move them on to a platform while just 4 per cent are actively moving all clients together.

Just one in 10 product providers believes that wrap platforms are their key route to growth this year, according to another Dunstan Thomas survey of 183 life offices, self-invested pers- onal pension providers and administrators.

One-fifth of providers intend to take advantage of the turbulent market to find acquisitions or partnerships while only 16 per cent are looking to develop new products this year.

Thirty-five per cent have adopted a wait and see approach to entering the wrap market while just 6 per cent have bought a stake in a key wrap platform.

Eighteen per cent say they are building their own wrap platforms.

Read says: “It is clear that providers are afraid of the risk and expenditure associated with running projects to make the most from the wrap opportunity.”

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