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Opening up wraps

At last we have momentum and a will to clarify wrap platforms charges.

As the FSA is so keen on treating customers fairly and transparent disclosure of charges, it is beyond me how wrap propositions have been able to hide their charges and make it so difficult to work out where the different charges are levied within each wrap.

In the RDR feedback statement, the FSA says it wants advisers to select transparent platforms and has outlined what it considers to be a poor example of a wrap platform.

The FSA has sent out a clear message to current wrap providers that issues over re-registration will not be tolerated.

As the FSA looks to lift professionalism throughout the advice process so that whole of market advisers provide unbiased, unrestricted advice, resulting in the adviser assessing a customer’s attitude to risk and personal circumstances and explain and justify any additional costs when switching on to a platform.

We know that in the post-RDR world, the use of a wrap may have some impact on the use of the “independent” tag and we will wait for further information although the FSA has said in a thematic research paper stated that platforms benefit both clients and their advisers if used properly.

Skandia’s new platform price-comparison tool will allow advisers to illustrate how the costs vary from platform to platform for the same portfolio being invested in the same product wrapper. Perfect to provide evidence of TCF when transferring assets to a wrap platform.

This comes at a time where new platforms are coming to the market, such as Novia, Macquarie and the re-launched Lifetime. I still remember American Express launching its wrap proposition in the UK in 2004 in a blaze of glory with its American experience, valuable brand and tablet technology. Even with these credentials, Amex decided to pull out of the pioneering UK early wrap years and head back over the pond.

Any new wrap provider which enters the wrap sector in these recessionary times needs to have extremely deep pockets to survive the competition threat from the established trusted wrap platform providers.

It is also good for clients and their advisers that wrap providers are able to negotiate no initial charges from investment houses when placing funds on the platform. The reduction in cost for the client plus the development of wrap platform planning tools, asset allocators and model portfolios all help to treat customers fairly and help to raise the level of service and advice provided by advisers.

We are seeing the results of moving closer to straight- through processing, with IFAs using rigorous back offices, obtaining electronic valuations for which around 40 providers are able to deliver, submitting business on line which is increasing at a rate of around 20 per cent annually and then selecting front-office wrap platforms to suit their business needs. All of which makes efficient use of technology one of the main deliverers of TCF and RDR-ready advisory businesses.


All disquiet on the Guernsey and Isle of Man fronts

Guernsey’s income tax department has been in recent negotiation with HM Revenue & Customs over the conduct of the arrangements for its offshore pensions plans. Guernsey and the Isle of Man do a considerable amount of business with British companies and individuals wanting to shift pension arrangements away from the UK.

Skandia opens up road

Skandia is to give free access to the healthcare service roadtohealth for new Skandia Protect and The Skandia Plan policyholders.

Rock to create bad bank

Northern Rock has revealed it will be taking its toxic assets and moving them to a separate ‘bad bank’.

‘How to…audit your auto-enrolment scheme compliance’

Avoid pension penalties with our auto-enrolment checklist

According to the Pensions Regulator’s annual commentary and analysis report released this month, 785 potential non-compliance cases were referred for investigation, with 23 auto-enrolment compliance notices issued. And they predict that the use of their statutory powers is only going to increase.


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