Once the penny finally dropped and it was clear there was no one wrap provider that could accomplish all we were looking for, it was relatively straightforward to move ahead with a few carefully chosen providers.
The selection process involved lots of discussions with other chartered and certified financial advisers who were facing the same challenge and a lot of one-to-one meetings with the main wrap providers.
As a fee-based firm, transparency and simplicity of charges was very important. Access to the Dimensional range of funds was also important and the ability to have a straight- through business process to cut down on administration.
Did we have any apprehension about taking this route? Yes. Initially, the majority of advantages in using a platform seemed to be in our favour rather than to the benefit of clients. It was only when I started talking to clients about how wraps worked that I realised that the benefits being offered were exactly what they wanted – a clear charging structure, access to online valuations and reduced paperwork. It has also enabled us to keep our costs down and we have been able to pass on savings to our clients.
We opted for Axa’s Elevate platform mainly for the reasons mentioned above but they have also been very supportive with ongoing technical support from a financial planning perspective and the Professional Edge team have been very supportive in helping me understand how to work more closely with professional connections. The system itself is very easy to use and the support that we were promised to help integrate wrap into our practice has been invaluable.
In addition to the points already mentioned, it has saved us a lot of time. We now do not need to try and choose different funds from different providers. We have a panel of funds we use, including investment trusts and exchange traded funds as well as the more traditional funds. This provides consistency of approach.
We are now less reliant on traditional providers and poor service standards. There were no glitches in setting up but there have been elements of the system that there have been problems with since. The model portfolios have not been working as well as they should have been.
Among the functions and features that we find most useful is the ability to research funds and see through the whole portfolio in terms of asset allocation and past performance. Also, the ability to print off valuations and performance reports in seconds is key.
Across the platform market, I still think charges are on the high side and that, over time, wrap will be seen more as a commodity offering, which I believe will drive down charges even further. Advisers will increasingly use a number of wraps to provide the best solutions for individual clients.
Brian Benson is managing director of Crown Wealth Management