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Supermarkets start to deliver the goods

The introduction of new chief executive Clive Boothman at Cofunds

earlier this month was a positive and progressive move for the

platform. After 18 months under the tenure of former CEO Sam Jensen,

Cofunds is now finally firing on all cylinders, competing with its

competitors at the cutting edge of functionality rather than playing

catch up and struggling to meet its deadlines.

While in its early stages Cofunds was often over-deadline and

over-budget, Jensen has now successfully fulfilled his mandate of

getting the platform up and running. Much of his time as CEO was

challenging but his supporters believe he will be kindly remembered

by the industry.

Financial Technology Research Centre director Ian McKenna says: “Sam

is a real visionary and was one of the few people who really

understood where the supermarket industry was going.”

With its four owners, Gartmore, Jupiter, M&G and Threadneedle,

having maintained their exclusivity pact throughout the last year and

a half – preventing them from joining any rival IFA supermarket – the

platform&#39s politics have often stolen the limelight from its

development and success.

However, with new CEO Boothman pledging to ditch the pact as one of

his first moves, it would seem the new management is keen to herald

the start of a new era.

Jensen only ever knew a time where the platform&#39s founders would

boycott their rivals and ensure that the UK&#39s biggest provider,

Fidelity, would not be part of its proposition but Boothman hopes to

welcome Fidelity onto Cofunds before the year is out.

McKenna points out that the only player which the exclusivity pact is

now helping, is Skandia – which has all four Cofunds&#39 founders as

well as Fidelity on its service.

Fidelity marketing director David Cowdell welcomes the end of the

Cofunds&#39 pact, and any rethink in the platform&#39s politics. He says:

“This is great news. It is what IFAs have been waiting for. They want

to see all fund supermarkets offer complete fund ranges from all the

fund companies in the market. It sounds as though that day is not far

off.”

As well as exclusivity, Boothman says he is also ready to address the

questions surrounding Cofunds&#39 ownership. One or more of the founders

have been rumoured to want to get out of their financial tie with the

supermarket. Boothman insists that remaining independent is of

paramount import- ance to all but concedes there could be some

changes.

New investors replacing some, or all, of the old guard is a possibility,

as is a flota-tion. However, a flotation would leave the platform

vulnerable to being taken over by a single provider – something which

all agree is to be avoided at all costs.

Having started the year by becoming the first platform to introduce

in specie transfers, enabling IFAs to transfer their clients&#39

existing business onto the supermarket, Cofunds has also laid down

its intention to lead the way technologically in 2002 – a fact that

has not passed unnoticed.

Plan Invest joint managing director Michael Owen says his firm

decided not to sign up to a platform until the end of 2001 so it

could spend some time observing each of the platforms&#39 progress.

He initially thought PlanInvest would end up joining FundsNetwork but

the final decision came down in favour of Cofunds.

He says: “They are particularly good at problem-solving and very

co-operative if things go wrong, which is very important with fund

supermarkets. We felt that Fidelity had a few more grumbles by

Nov-ember and that Cofunds just offered that little bit more.”

With the question of which providers are on which platform soon to

become irrelevant, the supermarket war will finally be fought

entirely on the grounds of functionality and service. Until now,

exclusivity has stifled the industry&#39s development. Those who have

seen demonstrations of the Selestia platform agree it offers some of

the best tools in the supermarket arena but few are willing to commit

themselves to a platform that is missing a whole host of the biggest

fund management groups.

McKenna believes Selestia will eventually come into its own. Its life

and pension arm is set for launch this spring – an extension which

McKenna believes all fund supermarkets will need to survive.

He considers that fund supermarkets will become commonplace, with all

providers having their own platform and the best offering a whole

range of products.

He says: “I firmly believe that any product provider that does not

create its own product supermarket within a couple of years will get

into a situation where they will not be able to sell their brand in

their own right.”

As an example, McKenna points to the US, where on the many

supermarkets, the host provider takes around 80 per cent of the total

sales. He believes that platforms such as Fidelity and Cofunds will

have a first-mover advantage but need to begin broadening their

proposition if they want to stay ahead. Skandia is already well on

the way to developing what McKenna sees as the ultimate platform.

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