American Express is planning to enter the UK IFA market with an extensive business solution proposition which could involve the US giant taking stakes in advisory firms in return for help with PI cover.
It would initially involve a wrap platform offering Peps, Isas, individual equities, bonds and offshore products but could evolve to include deals which help IFAs overcome mounting regulatory and insurance difficulties. It is believed that such agreements would involve Amex pledging to buy firms outright when the owner sells up or retires.
The company is seeking backing for the platform through presentations to fund firms. It is unclear whether Threadneedle, the company acquired by Amex in June as part of its plans to expand distribution, will be involved.
Amex's decision comes as part of a wider industry shift to wrap accounts, with firms such as Skandia, Seven Investment Management, Hargreaves Lansdown and TransAct already offering them. In September, Abbey National will become the first major bank to enter the market through its IFA arm. The involvement of financial giant Amex will increase wraps' threat to fund supermarkets.
Alan Steel Asset Management consultant Alan Adam says: “It is a growth area because it allows firms to retain or grow their assets under management. Amex is also making acquisitions and it makes sense to involve IFAs.”