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Model choice has can-do attitude

We started using wrap about 12 months ago for a number of reasons but principally because of the fit with our business model.

We have been moving towards the provision of a fee-based advice service rather than being reliant on life company commission. The retail distribution review will only accentuate this and we believe advisers will find it very difficult if they do not progress their businesses to transparent pricing quickly.

We wanted a wrap that was as RDR-compliant as possible a great range of assets, fund rebates clearly identified and adviser/client flexibility in setting fees. We also wanted model portfolio functionality and a choice of discretionary managers to work with. We have recently chosen to work with Andrew McCarthy and his team at Barmac Asset Management on a discretionary management basis.

We have been using predefined portfolios for a number of years and understand the time and resources to manage them properly.

However, we have decided that our future rests in being great financial advisers, regularly updating our clients and their needs rather than being investment managers, although we like to be consulted on portfolio content.

A wrap that can hold any number of model portfolios and that allows changes to be made to all clients within them simultaneously is a great resource to have.

We had no apprehension about wrap as we felt strongly this was the future of independent advice post-RDR. We use Novia as our chosen wrap provider for many of the points noted above but we also chose them for their local and head office support and, most important, their can-do attitude. We also wanted a wrap proposition that was independently run with no life company involvement or interest. We have seen so many times in the past how propositions fail when life companies become involved in the decision-making process.

Clients have really embraced the Novia wrap because of its transparency and asset choice/ flexibility. They like to see the value of their wealth online 24/7. Wrap has freed time for our advisers and back-office staff which has led to greater efficiencies and an increase in our 2009 turnover
of 15 per cent against expectation.

We had no issues in adopting a new wrap but it took a little time to become familiar with process and system functionality. Over time, our advisers and backoffice staff will become more familiar with the system. The only functionality we would like (and we believe it is coming soon) is the ability to analyse a client’s historical portfolio performance, taking into account all portfolio changes since inception, not just an analysis of their current holdings backdated over 12 months.

Wrap is and will be an essential wealth management and planning tool for advisers. It will differentiate IFAs from the wider market and add value to their businesses in many ways.

Geoff Catterall is director of Stonewater Wealth Management


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