Novia warns on cost of white-label execution-only service for IFAs

Novia is in talks with an IFA firm about building a white-labelled execution-only service but has warned that the cost of such projects could reach six figures.

The platform says it is looking at the cost of developing IT to cope with the needs of IFA firms that want to be able to offer execution-only products.

Chief executive Bill Vasilieff says: “Different firms want to be able to undertake different marketing through the builds while some want to use model portfolios or restricted fund choices which could push the costs into six figures.

“I think firms that want to offer this service need a strong consumer brand or large client bank.”

Last year, Nucleus member Fair Investments launched a direct-to-consumer Sipp product via the Nucleus platform.

The firm says it has no plans to develop any further direct-to-consumer products with Nucleus but expects to launch an Isa and general investment account through the Cofunds platform by the end of February.

Fair Investments head of savings and investments Oliver Roylance-Smith says: “The products will be available via the bundled charging structure and will be in place in time for Isa season.”

In November, Avalon Investment and IFA firm Cottons Financial Planning launched an execution-only children’s Isa with cautious, balanced and adventurous funds.

Avalon Investment managing director Harry Kerr says: “Developing a white-labelled execution-only service should not be massively difficult but it would depend on the complexity of the type of products you are trying to make available.”