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Platforms are ‘wolves in sheep’s clothing’

Insurance companies and fund companies with wrap platforms are “wolves in sheep’s clothing” and will be the biggest threat to advisers after the RDR, according to Succession Advisory Services chief executive Simon Chamberlain.

At Money Marketing’s RDR Invitational held in London earlier this month, Chamberlain said insurers and fund managers are using platform technology to hold on to their grip on the market.

He said: “The biggest danger to everyone in this market is wolves in sheep’s clothing, by which I mean insurance companies and fund managers. They have taken all the value by controlling funds and now those same firms are launching platforms, wraps and other vehicles to make sure people keep giving them money.”

Chamberlain.jpg
Simon Chamberlain (far right) making a point at the Money Marketing RDR Invitational last week in London. Also on the panel at the even were, from left to right: Yellowtail Financial Planning managing director Dennis Hall, independent industry consultant John Cowan and Baigrie Davies director Ian Howe. Over 100 advisers attended the event which was held at Grocers Hall in the City of London.

Chamberlain also told delegates that he believed the Government and FSA are likely to fail in their plans to create a new simplified product regime, especially as there are no concrete plans for a simplified advice service.

He said: “Simplified products are for debt-laden people and they should be advised to pay off their debts and take a holiday.”

Paladin Financial Services managing director Tim Purdon says there is a risk in becoming too reliant on the technology.

He says: “Generally, technology brings added value and provides services that IFAs might find difficult to source but one wonders who it is serving. Insurance companies’ direct arms seems to offer better terms than those available to IFAs.”

He adds that the regulator’s recent warning alerting advisers over use of risk-profiling tools provided by platforms is evidence that advisers need to be careful.

He says: “More naive and less competent IFA may feel they are of use, but just because it is provided by an institution they still need to be careful.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Does this explain why Succession’s preferred platform is the, er, life-company (Royal London) owned Ascentric?

  2. simon.chamberlain 21st February 2011 at 10:06 am

    Darren, you are incorrect, the Succession platform is powered by IFDL who also power Ascentric in the same way as other technology providers like FNZ Power platforms like Elevate and Standard Life. The difference for Succession members is that every pound they put onto the Succession platform is used to calculate their capitalisation value, which means they have a true business model that generates both income and capital, unlike any other IFA putting money onto an assurance company owned platform, where the only benefactors will be that assurance company’s existing shareholders. So I think we’ve all got decisions to make – this one shouldn’t be too hard!

  3. Hey! Someone’s woken up and smelled the coffee!
    That someone may have an axe to grind but who hasn’t?
    He is right: it’s all about distribution and they are currently in the process of controlling it with the help of IFAs with their heads in the sand.

  4. What about Sesame launching their platform via Elevate? Surely there’s no harm to a Sesame AR by placing clients’ money on Elevate?

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