View more on these topics

Chris Gilchrist: Wraps and the runaway gravy train

Gilchrist-Chris-MM-Peach-byline.jpg

The huge inflow into wrap accounts is a bonanza for wrap providers, fund managers and advisers. So entranced are we all by this runaway gravy train that we fail to notice that the advantages for the client are soon going to be entirely taken for granted. And most wraps are still PC-based rather than cloud and tablet.

Bank accounts, for example, are already well on their way to becoming bank apps. If you were setting up a bank today, that is what it would be – a bank app.

Likewise, it will not be long before we have wrap apps. Some exist already but they are just primitive precursors of what will be normal in a few years’ time.

One of the things holding this back is not that the typical wrap client is over 60 but that everyone else in the chain thinks that these older people do not want app functionality. 

But look at the oldies using Skype to talk to their grandchildren and buying books and CDs from Amazon, groceries from Ocado, photo albums on Flickr – all on their tablets. Do you really think they do not want access to their financial accounts on their handhelds?

So the direction of travel is clear, which raises a question: will wrap eat itself?

The issue is integration. If clients are going to have an app, they will want it to show everything. They will not want four separate apps for shares, funds, pension and cash.

Delivering that kind of integration for all of a client’s accounts will be difficult. And it may not happen because the banks probably will not play ball due to concerns about security. 

But if advisers envisage the end-point as an app that delivers all of the client’s saving and investment holdings in a user-friendly format, that probably will not be a wrap app. It will be a CRM app.

Wrap providers have been piling on functionality in an attempt to become the adviser’s CRM. They are making it easier to put other assets on wrap as well as the conventional shares and funds – life bonds, term deposit accounts and structured products, for example.

But this is a race the wraps must lose, at least for advisers with high net-worth clients, because so many hold non-standard stuff such as offshore and EIS. Ideally, you want to be able to show the client everything.  

So either your CRM adds app functionality or you need a front-end system such as Moneyinfo to pull the data from your CRM and app it to the client.

I have no idea which will be adopted most widely but this is where IFAs with HNW clients will want to go. In which case, all the fancy reporting features of wraps will become less relevant. The serious work will happen in your back-office CRM, where you will generate integrated asset allocation and portfolio analysis.

So could the end-game be one in which advisers with larger client assets – such as bigger wealth managers – migrate to cheaper, simpler wraps because they do not need the fancy stuff? The biggest already have their own low-cost wraps. Restricted advisers with clients having smaller assets are likely to aggregate into larger groups that adopt semi-bespoke commodity wrap apps.

Does this runaway train movie have a happy ending? I think Casey Jones had better watch his speed.

Chris Gilchrist is director of Fiveways Financial Planning, a contributing author to Taxbriefs Advantage and edits The IRS Report

Recommended

Money-Cash-Coins-GBP-Pounds-UK-700x450.jpg
4

Govt to force fund managers to disclose all pension charges

The Government is to force fund managers to provide a full breakdown of all charges related to defined contribution workplace pensions. In a written ministerial statement published this morning, pensions minister Steve Webb confirmed the Government will introduce new measures requiring transaction charges in pension schemes to be disclosed. Webb said: “I am pleased to announce […]

EU-Europe-Euro-Flags-700x450.jpg
1

MM leader: No excuse for delay on pension charging transparency

The Government’s statement of intent over the need to improve the transparency of pension charges is a welcome intervention. Whether driven by pressure from Labour or Lord Lawson, who was pushing a potentially embarrassing amendment to the Pensions Bill, or building on the Office of Fair Trading’s call for a better disclosure regime, the direction of travel […]

Finance-Concept-Technology-Brain-Money-700x450.jpg
4

Cofunds eyes adding protection to its platform

Cofunds is looking at launching protection products onto the platform in a move which could see the creation of an investment-linked protection range. The company says it is considering a number of options to add protection on the platform, which could include investment-linked protection or a wider range of protection products. A spokeswoman says: “We are […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Hmmm, some Gravy Train – most participants make a loss! Also, I have a tablet and use it for Wrap Account monitoring all the time. Not hard, because it has a web browser – don’t all of them?

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com