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Making the switch

Hindsight is a valuable thing and often goes hand in hand with experience.

Wraps are still relatively new with developments being designed almost on a daily basis, so it is understandable IFAs can select an incorrect wrap for their business model.

But dare we switch from one wrap to another? All the upheaval, the administration headache – is it all worth it? What’s in it for the IFA?

Let’s start from the beginning. Wraps were designed to benefit clients. In reality, wraps have evolved to benefit IFAs, providers and fund management groups. It is easier for the IFA to get a consolidated view of clients’ assets. Providers can attract assets and fund groups have a ready-made distribution channel.

Therefore, if an alternative wrap offers accountable improvements on an IFA’s existing provider through cost savings, a wider range of product provider links, wider fund links or anything else deemed of value, isn’t the IFA obliged to switch wrap for their clients’ sake?

We have recently been through the perceived headache of switching wrap provider. Our chosen provider was Novia.

The backbone of the Novia team were the founders and developers of Selestia, we found Paul Boston, the sales director and Dave Field the transfer tactical expert, to be very knowledgeable about the platform market and receptive to IFAs needs in the changing RDR world. Once the directors formed Novia, they started with a blank piece of paper to develop a new wrap and to learn from their mistakes. We believe their offering is very competitive through costs and functionality and know they have many combined years of transferring assets both from product providers and wrap providers.

We put in place an agreement between us, our clients and Novia to transfer existing assets to Novia. This was largely our only input in the in specie transfer process. We provided a list of all assets being transferred to Novia who then highlighted any potential issues from the off, for example, suspended funds or infrequently dealt funds. All other transfer administration was carried out by Novia. Once all transfers were settled we received notification, a transaction history and a consolidated valuation.

The in specie transfer process ought to be easy – it is just a stock transfer after all. Trust me, it’s not. Throw into the mix differing agency num-bers, fund charges, share clas-ses and lethargy and you can guarantee a breakdown in the process. This becomes especially true with the more esoteric investments and anything held in a tax wrapper.

Novia made the process seamless and painless. We have now been with Novia for the best part of a year. We have asked for tax wrappers to be added, these have been added. We have asked funds to be added, these have been added. We have suggested useful adds-ons which would help us and our clients, these have been developed or are in development and soon to come on line.

Although a wrap is not just for Christmas, it doesn’t have to be for life either.

Ben Stevens is a technical consultant at Truestone Asset Management



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