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The way to wrap

Pick an IFA to select the right platform for transferring a range of investments

I have a number of different investments I have made over the years and I have read about wrap platforms that may enable me to hold the investments in one place. I would also like one-off advice on the investments I hold. Where should I go to get platform and fund advice?

You have mentioned that you would like one-off financial advice but can I politely remind you that the purpose of financial planning is to plan that you and your family have financial independence so that the property in which you live is paid for and there is guaranteed after-tax income greater than budgeted expenditure both in sickness and in health.

The successful construction of an investment portfolio depends on a variety of things but hinges upon purchasing the right assets and maximising the tax efficiency and security of investments to match your risk profile, tolerance to loss and investment outlook.

There are two main types of fund platforms – wraps and fund supermarkets. Both are services that enable investors to hold and buy investments online. The investments purchased or transferred on to the wrap platform can then be held in a range of taxefficient wrappers such as an Isa or Sipp.

The investments that can be purchased via each platform vary depending on the provider. There are currently around 30 wrap platforms available in the UK with more expected. Once your investments are on a platform you can benefit from planning tools such as stochastic portfolio planning, tax planning and life cashflow modelling.

As you are seeking financial advice, I suggest you see an independent financial adviser, you can find a suitable one at www.unbiased.co.uk. Under the soon to be introduced retail distribution review, the IFA you choose to work on your behalf to manage your investments and bring them on platform will give you ongoing service and advice as you require. It is easier to know which investment to buy than to know when to sell, particularly in these volatile markets.

The independent financial planning advice will include the most suitable platform, products, funds and adviser services for you.

It may be you have investments that cannot be held on a platform, such as with-profits. In that case, any off-platform investments will be monitored separately by the IFA.

Data from Unbiased shows that, on average, IFAs are using three platforms for different client segments with different needs and each platform selected will have had due diligence undertaken and held on record. The FSA has recently said that if an advisory firm recommends its clients only one platform, regardless of their needs, this would not be classed as independent advice.

If, however, you decide to manage your investments yourself on a platform, the rules for both advised and non-advised platforms will form part of the FSA’s payment ban proposals and execution-only platforms will have to fully disclose commission or fees from fund managers.

Although there are no regulator rules to set the time to re-register your investments to the platform, it usually takes no longer than a few weeks and sometimes transfers are much quicker.

It will be easier to monitor the value of your investments when on a platform. You will have access 24/7 and it has been proven that net worth increases when independent advice is taken than when an investor does it him or herself.

Research form Platforum states that in the fourth quarter of 2010, adviser platform assets under administration grew by 8.5 per cent to over £146bn. This indicates that whatever regulatory changes arrive in the future, wrap platforms will continue to grow into one of the most attractive ways to hold and manage investments.

Kim North is managing director of Technology & Technical

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