In essence, a wrap is simply an online environment in which an adviser can manage all of a client’s assets in one place to best effect. That may not sound very radical but it stands to fundamentally alter the complex relationship that has historically existed between financial advisers and the big insurance companies. Indeed, wraps may ultimately sever that relationship.
The wrap market, as it stands, is comprised of both IFA and provider-driven propositions. IFAs considering wrap now have more choice than ever, with new entrants to the market as insurance companies recognise that this may be the best way to access or retain their “distribution” channel.
For Helm Godfrey, the choice was straightforward. We recognised the potential very early on and have been using Transact, Abbey and Selestia (not really a wrap) and now Nucleus. As always, one looks for the best proposition available.
We have thrown our lot in with Nucleus because we feel that it will develop to be the best. We say that because it is an adviser-led proposition developed with and for advisers who have to give value for their clients, is open and transparent in its charging structure with neither hidden charges nor subsidies. And it recognises that this is, in essence, an online administration and consolidation arrangement to provide simple and effective asset management to clients. Future developments will further enhance this proposition.
This is all it does – the success or failure of Nucleus will depend on how effective it is in delivering the above. This is unlike many other wraps – which are insurance company owned – and therefore not core. Already, we have seen American Express enter and leave the market and there are now rumours that Norwich Union is considering selling its wrap.
We, as a shareholder in Nucleus, are continuing to take control of our destiny in an area which I believe is of fundamental importance to our success.
IFAs joining in the future will also participate in this grand vision of greater control.
Bruce Wilson is managing director of Helm Godfrey.