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Problem of picking the right platform turns IFAs off wrap

Paradigm senior partner Paul Hogarth says IFA firms must adopt wrap to survive but believes many are being held back by the magnitude of the decision to choose a platform.

Former Bankhall founder Hogarth told delegates at the 1st-The Exchange conference that businesses which embrace technology and platforms will be the ones to survive the financial crisis and flourish in the future.

He said: “Wrap technology is absolutely huge. This is the land-grab in town but I think there is a big reason why wrap technology hasn’t been adopted as much as everybody expected. That’s because it is your biggest single decision. How on earth can you make sure you use the right one?”

“You need to make sure you’ve got full factory-gate pricing from day one and that you’re buying institutionally. But the most important point is transparency so you can show exactly what that fund cost, what your advice is costing and what the tax wrapper costs.”

Hogarth notes there are 14 wraps on the market but only nine give you the complete range, five of which give you full open architecture.

“That takes you back to the question – do you want to use a product provider’s wrap? Personally I like the independent side of life,” says Hogarth.

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