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Cofunds ahead of target with 5.4bn under management

Platform invests 150m in development and says it will not cut make cutbacks to bring forward profitability

Cofunds says it is ahead of target on funds under management but will not cut investment in its services to bring forward profitability.

The platform has invested 150m in development so when it does reach profitability, it will be able to offset a significant portion of this sum against the tax on its gains, effectively mea-ning that its first 100m of profits will be tax-free.

Cofunds has 5.4bn in assets under management, hitting its full-year target with two months to spare, subject to market movements. Last year, it lost 16m, which it said was in line with its predictions. Further investment will be required to support its pers- onal pension wrapper, which is to be launched with Legal & General in April.

Cofunds managing director Mark Jones says the pension wrapper, coupled with the platform’s bond, Isa and funds offering, will take it closer to a wrap proposition and better lock in advisers.

He says both Cofunds and rival FundsNetwork’s expan-ded services will raise the barriers to entry for any potential rival newcomers and advisers who are still using two or more different platforms are increasingly likely to settle on a single platform. He believes that by getting its bond wrapper on board before FundsNetwork, there will be an element of first mover advantage.

Jones says Skandia’s decision to stop offering re-registration will hit its inflows because consolidation of assets is one of the prime purposes of wrap.

He says: “There will always be new players coming into the market but you have to ask what they are bringing to the party that is different. If a platform does not allow advisers to re-register assets on to it, then why bother?

“I also believe in first-mover advantage and as platforms develop broader functionality, more and more advisers will migrate to just one platform.”

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