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Putting the hype into hypermarkets

Following the arrival of fund supermarkets 18 months ago, many of you are already looking for the next generation of investment platform. You are asking why fund supermarkets are simply adding more and more funds and not offering any added-value services.

Well, that has now changed. Last year saw the launch of the first ever UK investment hypermarket. This will set the pace for future e-commerce developments in the investment marketplace.

What is an investment hypermarket? In simple terms, it enables all investments to be viewed and managed as one. It is much more than a mere fund supermarket.

An investment hypermarket provides access to a wide range of funds and fund managers. Importantly, it provides access to these through many different tax wrappers. For example, it offers not only Peps, Isas and unwrapped funds but also onshore and offshore bonds, individual and group personal pensions, occupational pensions, FSAVCs and maximum investment funds.

What does an investment hypermarket do? It enables you to build and manage model portfolios and rebalance clients&#39 investments to the model portfolio when needed. Bulk values, bulk switching and fund-based fees are also an important part of what you demand today.

There are several key objectives behind the development of these services. They include promoting independent advice by helping you to improve the efficiency of your offering in the market and to place you at the centre of your clients&#39 financial lives. Such services can position you to strengthen relationships, gather richer information and cross-sell products and services to existing clients.

The arrival of investment hypermarkets will have a significant business impact for IFAs. It will result in unit cost reductions for your businesses by enabling both standardised and customised financial and investment advice to be delivered. This will lead to added value for IFA businesses by taking customer service to the next level. It will also enable you to compete successfully with other channels by being seen as a technological innovator.

This is a major development for the UK financial services industry which IFAs have been seeking for some time. While many features of the investment hypermarket are online, in response to your demands some are offline where this is important.

The investment hypermarket will give a greater ability to you and your clients to manage investments simply and under one roof, while using the many funds and fund managers available on the platform. This will offer many new and exciting benefits. Some of these are:

•You may view and analyse clients&#39 investments online at the push of a button to assess their current investment position. This investment data will be able to be broken down by client, fund or product.

•You may download bulk client data for analysis offline using, for example, Excel or your own back-office system where it has developed and provided with the necessary functionality.

•With advisory or discretionary switching authorities, you may manage each of your clients&#39 plans individually.

•With advisory or discretionary switching authorities, you will be able to manage all your clients&#39 plans together using patented bulk switching technology.

lYou will be able to build your own model portfolios using the platform&#39s extensive fund range and apply each model portfolio to selected products. You will have a choice of two portfolio-building tools. First, you will be able to choose a simple online tool. Alternatively, you will be able to build your model portfolio offline using a proven fund selection tool and then import it to your online investment hypermarket pages.

•Having built a model portfolio, which has been applied to one or more plans, those of you who have advisory or discretionary switching authorities will be able to rebalance those plans to the model portfolio as needed.

As you have come to expect from the leading IFA-only multi-manager platform, this is a major first for the UK financial services industry.

It will undoubtedly be a market that many others are going to need to enter if they are going to meet the needs of their customers effectively.


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