Fund supermarket moves have to be good news for IFAs

Just like going to Tesco or Sainsbury, IFAs will soon be able to shop

around when selecting a fund supermarket.

Fidelity has been joined by a new outfit, Consolidated Funds, financed by

four other fund management players. By November, when the new operation

launches, IFAs will no longer face a Hobson&#39s choice between direct player

Egg, which cuts IFAs out of the picture, and Fidelity.

Gartmore, Jupiter, M&G and Threadneedle have joined forces to create their

own project primarily because they are reluctant to join Fidelity. The

refusniks believe that signing up would hand too much power and information

to the “Big F”.

For IFAs, there is less of a threat. Both Fidelity and the new operation

allows themto white-label the supermarket as their own and both allow IFAs

to be paid commission. IFAs worried about Fidelity&#39s size and clout should

remember that, both here and in the US, Fidelity remains committed to

advice, even if, like most providers, it is not above accepting direct

business too.

But the initiative from Gartmore et al has to be good news. IFAs can now

expect the electronic equivalent of loyalty schemes and loss leaders

although highest on their wish list is probably a service that works

quickly with no bugs or admin blunders. The struggle will be intriguing as

both players and perhaps several more search for the formula that will make

them the Tesco of fund supermarkets and not Sainsbury, let alone Marks &

Spencer.

No matter who is the eventual winner, advisers should be grateful to both

operations for pointing the way for them to get a share of business in the

new e-commerce world.