The simplification of the Pep/Isa rules offers a superb opportunity not only to provide a service for existing investors but also to attract new prospects.
The possibilities offered by fund supermarkets are exciting. Whether one chooses Cofunds – 230 funds from 25 managers, or Fidelity's FundsNetwork – 440 funds from 32 providers, there are significant opportunities for consolidation, rationalisation, diversification but, above all, simplification.
The media so far have concerned themselves with the opportunity for investors to diversify geographically. Although this is of some appeal particularly to mainly younger clients, the real story is single-company Peps and bundling.
Those investors fortunate to have been offered save as you earn and profit-sharing schemes and to have had the foresight to have made use of single-company Peps can now reduce the stock-specific risk within their asset profiles. This opportunity comes as many people have been introduced to stock-specific risk.
Similarly, those management groups which have been unable to unbundle Peps will now find themselves severely punished. It seems likely that many advisers will be justified in gradually switching Peps to the supermarkets. Perhaps the biggest benefit of this consolidation process is the reduction in the amount of paperwork for client and adviser. The attractions of a single statement and point of contact cannot be overestimated.
Michael Owen is joint managing director of Plan Invest Group