He says smaller platform providers will find life increasingly difficult this year and will look to be taken over.
He says: “This is an oversupplied market, with too many people trying to do the same thing. In the next 18 to 24 months, the smaller players will leave, amalgamate or be bought. But who will buy them? They may well get sold but not at the premiums they expect. We might see some admin offerings but we are not going to see a lot more big wrap launches in the future.”
Polson’s comments follow the more bullish views of Axa head of distribution services Paul McMahon in last week’s Money Marketing. He said the UK wrap market was ripe for investment from overseas because of the underfunded pension system and the potential for a huge increase in transactions being undertaken on platforms.
Nucleus chief executive David Ferguson challenges whether Polson’s definition of small is based on net inflows or historically accumulated and legacy assets. Ferguson says: “As ever, a large life company confuses scale with profitability. There is no demonstrable correlation between spending outrageous sums of money and creating shareholder value.”
Novia chief executive Bill Vasilieff says: “Standard Life has been a small player in the wrap space for quite a long time now so I guess they should know.”