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Dalton-Brown criticises insurers’ wraps as ‘purely defensive move’

FundsNetwork chief David Dalton-Brown says life company wraps are purely a defensive move to protect insurers’ legacy position in the market.

At the Cazalet Consulting conference, Dalton-Brown singled out Norwich Union’s Lifetime wrap as an example.

He said part of their agenda is to control distribution by forming institutional relationships with fund providers with institutional pricing contracts.

He said insurers have an increasing tendency to act as gatekeepers and a clear advantage of platforms over wraps is that customers do not pay for them.

Dalton-Brown said he supports the IFA-owned wrap Nucleus and welcomed it as a challenger in that space but ques- tioned whether it has the capital and know-how to succeed.

He also hit back at criticism of direct business from IFAs, arguing that advisers in the US appreciate the fact that direct business is one of the biggest generators of leads.

He predicted that platforms will take 80 per cent of Isas and 60 per cent of all unit trust and Oeic business by 2009.

He said: “We would never call ourselves a wrap. Wraps are a defensive move where customers pay for the wrappers. We would never do that.”

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