threesixty is warning IFAs they might be caught in a catch 22 over the e-commerce capabilities of fund managers.
The support service provider says the industry is at risk of a ‘Catch 22’ situation, where IFAs are unable to transact electronically because fund management companies have not developed their proposition sufficiently.
Conversely, fund management companies do not see a need to develop them because IFAs are not submitting enough business to them electronically.
threesixty partner Phil Young says: “IFA use of platforms has increased dramatically in recent years and whilst there are those who will continue to use the telephone, there is an increasing acknowledgement by the intermediary that the audit trail which online submission brings is of real value. In the main they have realised that it demonstrates best execution and reduces the risk of processing errors.
“An electronic audit trail should help to reduce the burden on IFAs to keep copies of paper statements, which are often retained for capital gains tax calculations, and can be used to produce automatic CGT reports for clients. There are enough advantages to intermediaries in transacting electronically to ensure that the functionality will be used once it has been provided and it would be good to see more fund management companies forge ahead with development before the situation seizes up.”