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Supermarts need to take down IFA sales barriers

Structured product providers have urged IFAs to lobby fund supermarkets to switch to an open architecture model to allow the products on their platforms.

Speaking at a Money Marketing structured products round table, Blue Sky Asset Management product development director Mark Dickson said fund supermarkets were the key barrier to IFA engagement with structured products.

He said: “They generally do not want to engage with us and the only thing that will encourage a discussion is pressure from their customers, the IFAs.”

Quantum Asset Management chief executive Mark Mathias agreed: “We need the IFA community to put pressure on the mutual fund supermarkets to be much more open architecture. Currently, IFAs are forced to hold structured products out- side the rest of the portfolio so it messes up their business model.”

Keydata Investment Services director of sales and strategy Mark Owen said platforms are reluctant to offer structured products as they prefer the daily dealing and trail commission available from mutual funds.

Morgan Stanley executive director of UK structured solutions Marc Chamberlain said: “They like their trail but these products are charge-based so you are going to get a level of dealing, albeit less than a mutual fund.”

Bestinvest senior investment adviser Adrian Lowcock said a move by supermarkets to offer structured products would depend on IT hurdles and cost. He said: “A lot of clients have their money there so platforms are perhaps missing out on an opportunity. It is a case of getting on to them to sort out their IT as it seems that is the sticking point.”

Helm Godfrey managing director Bruce Wilson said platforms should be encouraged to offer all investment products but said: “For IFAs, there are more challenging issues to address before we get to this one.”

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