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Cash fears on transparency

Threesixty has warned there is a danger of platforms being seen as “a cash piñata” with too many players trying to make money out of them.

At a Money Marketing wrap and platform round table Threesixty partner Phil Young raised concerns over the transparency of some white-labelled platform deals.

He said: “There is the potential explosion of white-labelled wrap platforms and they are effectively adding cost to the platform. There are some deals out there that I just think are unacceptable.

“It could start to look like it could be classed a cash piñata to whack with a stick until money comes out of it. That is a concern. It starts to feel as though this brave new world we are looking to try and develop is starting to get a bit more muddled and eroding the confidence of the consumer.”

Fidelity Fundsnetwork head David Dalton Brown said he shares Young’s concerns over transparency. He said: “There are some instances where because the platform is deemed to be a product not a service offering the client does not get to see all the costs disclosed and those costs are passed on to the client.”

Young said it was not just the problem of hidden costs but the fact that clients may not be told they could be placed on another platform which is virtually identical to the one their adviser is using for half the price.

Capital Asset Management Alan Smith said: “There is quite a lot of activity around wraps for people who do not need them but it seems to some extent they are being used as another opportunity to churn money into another area to generate further recurring income without having a clearly defined proposition to deliver that to the client.” But he added that advisers who have a properly defined financial planning process cannot deliver this without a platform.

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