Fidelity Investments may be the number one UK fund group but UK managing director Richard Wastcoat is acutely aware of the need for repositioning as the distribution landscape changes.“We are committed to different distribution channels but the IFA is important to us. As individuals committed to independence, if we have a good investment story, we will get some of their business,” he says. But depolarisation will see Fidelity in links with banks. What does Wastcoat say to IFAs who might feel unloved as their favourite fund firm links with their high-street banking rivals?He says the situation may be similar to that for the supermarket. At first, IFAs had fears about the direct-to-consumer part of FundsNetwork but many advisers now believe that they gain business from investors who initially go direct but then seek advice. Wastcoat says: “We are trying to meet different investor needs. Banks will help grow the market and a good IFA with a strong set of business practices is going to benefit from that overall growth. If banks are converting new people to investing and capturing the lower end of the market, as people go upscale, they will have needs IFAs can meet.” Part of that changing IFA proposition will be multi-manager. Wastcoat says: “We believe in the fund of fund aspect. It will be interesting to see which model thrives – fund of funds or multi-manager – and after that who has got the best performance. It is being talked about in theory rather than practice.” A key plank of Wastcoat’s argument is that Fidelity will have a process in place that can handle volumes in the billions rather than millions. He says: “We are looking to build something that is scale-able and sustainable, not just delivering results in 2005 with hundreds of millions but in 2010 with several billion. Have others built those businesses to cope with that scale? Richard Skelt would say he is doing a lot of analytical and risk-based research. In that sense, he is different. Others may be more active manager pickers but will it work as well in a much bigger market?”He deploys a similar arg-ument for FundsNetwork. “There are still lots of ideas from operations that have not seen hundreds or billions of pounds sitting on their platform. They have not demonstrated they can do the functionality or achieve operational efficiency. One key reason for choosing Fidelity is that track record. It proves we can del-iver the next generation of development. Platforms will move from the collective space into bonds and pensions. Lots of people say they are going to do that but it is expensive. Who is going to be able to afford it?”Wastcoat also notes that bond platforms are moving into the collective space but insists again that the likes of Legal & General and Standard Life’s Sigma are also at the stage of making promises. He also stresses that reregistration, which Fidelity offers, will be a key differentiator. Yet such developments do throw up several potential conflicts where Fidelity is trying to get its funds on the platforms of rival distribution platforms and insurers while vying with them to sign IFAs to its platform. Partly due to this, the firm has split its sales and marketing operations for funds and the supermarket. Wastcoat says: “It helps give some clarity. The Fidelity team are knocking on life companies’ doors to get on the bond links, servicing Cofunds and encouraging Peter Hargreaves and everybody else as to why Anthony Bolton, John Stavis and others are credible investment stories. On the FundsNetwork side, we are saying to IFAs, we want you to use our platform.” The group now has to have several conversations even with IFA groups about wrap, whether Fidelity is one of, say, five fund groups on a multitie, and yet another about whether FundsNetwork is adapted to provide that multi-tie platform. Wastcoat says: “We can cut the functionality on a platform – cut the partner list however the IFA chooses so they can choose FundsNetwork with, say, five houses and 17 funds. Fidelity might be two of them – not 15. I keep stressing the message that there is no bias from us on that.” The group may be involved in detailed conversations with IFAs but it is very aware of wider competition. Wastcoat notes with satisfaction that Fidelity, since its UK debut, has always been there or thereabouts while other names have fallen away. But even here his eye is on the broader picture. Recent regulatory strictures on past performance might play to Fid-elity’s brand strength compared with its fund house peers but Wastcoat fears the real winners might be insurers which have household recognition despite poorer performance. It is a similar view on equ-ity investing in general. He notes that Ucits 3 may bring more products and competitors into the fund space but the group is also aware that collective funds share of UK savings is not what it should be. “Our competition is still partly bank deposits – what we would call inert savings. Collective funds market share is not maxed out,” he says. IFAs may not like all that they hear from Fidelity but on this at least they definitely agree.