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IFA warns wraps offer compliance bypass

Wrap platforms can be used to bypass network restrictions on the amount an adviser can invest with a single provider, says Family Office IFA Sebastian Lyle.

Lyle told the Money Marketing Wrap Round Table last week that Positive Solutions puts a 20 per cent cap on the proportion of money its members can invest with a single provider. However, he said the network deems wraps and fund supermarkets to be the product provider rather than the underlying fund manager.

He said this means advisers can invest all a client’s money with the same fund manager if investments are spread across several platforms.

Lyle said: “Many networks will only allow you to put 20 per cent of your business with any one product provider. The wrap account is seen to be the product, not the fund, so you could in essence put all your money with Fidelity across a number of different platforms and the compliance engine would not pick it up.”

Sesame sales and marketing director Steve Young said: “It is our understanding that the FSA is looking at the notion of concentration, whereby if an IFA was using a specific provider for more than 25 per cent of a particular packaged product, they would need to give a reason for doing so.

“I think this adviser is probably right and we will be arguing with the FSA that the rules need clarifying.”


Snowdonia range on Canada Life platform

The Snowdonia fund of funds range from Buckles Investment Services has been added to Canada Life’s onshore platform. The Snowdonia growth, balanced and income fund have attracted over £100m since launch and are already available through AIG Life. Buckles was keen for the Snowdonia funds to be available through Canada Life’s flexible investment bond as […]

Fee model is out of this world

I refer to Robert Reid’s article (Money Marketing, August 17). As you expect from Robert. he gave a clear and frank view on the threat that churning and persistency has on our industry. He cleverly compared this with some of the current crop of reality TV shows. At Scottish Life we have let our IFA […]

Horses for courses

When it comes to investments, different clients have different needs. At one end of the scale are people who are willing to take a higher risk for greater potential returns. At the other end are people who will never feel safe in anything other than cash.

Capita & Octopus launch VCT & Sipp hybrid

Capita Sip Services and Octopus are launching a joint wealth management product combining the tax benefits of VCTs and Sipps, allowing for 38 per cent on pension contributions. The product will only be available through IFAs and will use utilise Capita’s enabler infrastructure to capitalise on A-Day changes, permitting a broader range of investments and […]

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