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Perfect partner

In my opinion, a wrap is more useful to a financial planning practice than it is to a client. The problem, as I see it, is the cost of the wrap against the value added for the client.

By way of example, if you had a client with a port-folio totalling 500,000, most wrap providers would charge around 0.5 per cent a year of the assets held on the platform.

The cost would therefore be 2,500 per annum or 208 a month. Our annual fee for funds under management is 0.5 per cent per annum so the cost of the wrap is equal to our fee for the ongoing advice and management.

The benefit to the financial planning practice is clear. Lower administration costs, online viewing, a more lucrative exit strategy, the ability to purchase funds more easily or appoint a discretionary fund manager.

The benefit to the client is less paperwork, cheaper access to individual funds and online viewing but I am not sure that this warrants the extra cost.

I suppose if you have a client with 20 holdings all over the place and they are keen to keep them, it may be worth the fee. But who is going to monitor the funds and switch when appropriate? (Not me).

This is one of the reasons we have chosen to use the 7IM Tethy wrap platform. As a practice, we outsource our discretionary fund management to 7IM and there is no charge for their wrap facility, provided you are using their investment management.

You can purchase any fund via their wrap facility at an additional charge of only 0.25 per cent per annum to the client, which is very competitive. Viewing is available online for both adviser and client.

The Tethys platform, with practice, is very easy to navigate. New clients go straight onto either discretionary or advisory via the platform. We are gradually introducing our existing clients onto the Wrap as and when appropriate.

As far as service is concerned, the team at 7IM deliver an excellent level of ongoing support. The discretionary management is a breath of fresh air and our phones are certainly not ringing off the hook with clients worrying about their portfolios as they know it is in good hands and that tactical tilts are being implemented.

We think therefore that 7IM is the perfect partner for wrap – low-cost, outsourced investments with a team who really care and strive to protect your clients’ assets. This means I can spend more time on client strategy, cashflow models and working with them towards fulfilling their dreams and less time worrying about the markets and switching funds.

Our exit strategy is well in hand and I can get on with enjoying the job. Just going for a cup of tea.

Louise Oliver is certified financial planner at Taylor Oliver


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