Major platforms are being too slow to offer whole of market products to IFAs, including investment trusts, in the run-up to the RDR, warns Henderson’s James de Sausmarez.
Henderson Global Investors head of investment trusts de Sausmarez says: “I think the disappointing thing at the moment is the big fund platforms which dominate the market, that is Fidelity FundsNetwork, Cofunds and Skandia, are all being very slow about broadening their service to include whole of market products including investment trusts.
“What is the point of having RDR and asking IFAs to consider whole of market if they cannot buy them through the major platforms.This must be a concern for the FSA.”
However, de Sausmarez believes the RDR will have a positive impact on the investment trust sector.
He explains: “There is no downside for investment trusts in the RDR at all. The chance to level the playing field within the IFA market is very good news for investment trusts.
“In a post-RDR world, for IFAs to call themselves independent, they must consider the whole of market. The removal of commission bias and the introduction of fees means IFAs will be able to consider whole of market without worrying that it might affect their remuneration. Achieving this is a key objective of the FSA in introducing the RDR.”
De Sausmarez says there will be a rise in the number of IFAs using investment trusts, while low cost and good performance in investment trusts will appeal to advisers.
He adds: “I think IFAs are going to be keener on the larger and more liquid investment trusts than the more specialist ones and that’s understandable.
“It will be slow burn for investment trusts to grow their share of the IFA market because, of course, IFAs at the moment don’t know much about investment trusts. They have to learn about them first.”