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Cofunds says it will unwind exclusivity pact

Cofunds is set to unwind its exclusivity agreement which prevents its founders joining rival IFA platforms, according to new chief executive Clive Boothman.

In an interview with Money Marketing, Boothman says he believes the pact, which covers Gartmore, Jupiter, M&G and Threadneedle, has now served its purpose and should be phased out before the end of the year. Fidelity says that such a move would reverse its decision not to join Cofunds.

Boothman maintains that the providers are committed to keeping the platform independent and dismisses the idea that the platform would fall into the hands of a single provider.

However, he hints that there may be some reorganisation of the platform&#39s ownership over the coming year, with some industry pundits now speculating that Cofunds may opt for a flotation on Aim.

Commenting on the FSA&#39s proposals to abolish polarisation, Boothman voices his support for the IFA sector, expressing concerns that blurring the distinction between tied and independent advice would constrain product innovation and choice.

He says that while IFAs hold a minority of market share, they play a crucial role in product development and selection, and have an overriding beneficial effect on the retail investment market.

“The independent financial advice sector has an influence on the whole industry in the way in which products survive, in the way which products come to market, in the way which charges are levied and in the structuring of products. The sanitising effect of having an independent sector, which is a champion of the good, has an overriding benefit for the consumer,” he says.

Commenting on Cofunds&#39 exclusivity arrangement, he says: “In all likelihood, one would expect that within the course of this year there will be some reduction in exclusivity because, in the end, Cofunds is transparent and believes in competition and a free market.

“We probably do not morally support the idea of a constant bar on market competition. From a financial adviser&#39s point of view, clearly they would like access through platforms to the widest possible number of participants.”

Profile, p43

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