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Towry says wrap firms own clients

Clients with assets on a platform are owned by the wrap provider and not by the adviser, according to Towry group chief executive Andrew Fisher.

Speaking at The Platforum conference in London last week, Fisher argued that while IFAs may think they own their clients when they move their assets onto a platform, it is wrap providers who hold the rights to client ownership.

He said: “No one owns the client from the point of view that the client can always go somewhere else for advice but there are contractual relationships. With most wraps, the client is owned contractually by the wrap provider. That is why many life companies choose to write to clients who have been introduced or managed by IFAs.

“IFAs think they are the custodian and owner of the client relationship but actually they are not.”

But Macquarie head of distribution John Porteous said: “Typically, ownership of the client relationship tends to be at the adviser level. But increasingly, firms that are seeking to leverage their value will be trying to ensure that their relationship is at the firm level and platforms can help them do that.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Nobody “owns” a client. The client is and at all times should be the arbiter of which firm or individual is his/her financial adviser. That having said, a firm may well consider itself entitled to require of its employees or consultants an undertaking that if they go to work for another firm that they will not seek to entice clients away and, once the contract of engagement has been signed by the employee/consultant, any breach of that undertaking would probably be difficult to defend in a court of law. Proving enticement, though, may well be difficult to prove. All the consultant has to say is that the client had his mobile phone number and that it was the client who initiated contact. A firm cannot prohibit a client from contacting the person with whom s/he may have dealt for several years and with whom s/he wishes to continue that relationship.

  2. I have been saying this for years.
    It’s all about distribution so when the surviving life companies saw that they were losing control in the move from insurance bonds to collectives, wraps and platforms were taken up as a viable alternative.
    Independence is about having control. if you don’t have it, you ain’t independent and acting totally in the best interests of clients is not possible.

  3. I feel the comments by Mr Fisher are a little disingenuous.
    His company provides a platform for its DFM called the IIM where it proves very diffiocult for a client to feel that Towry does not own them.
    My clients can easily appoint another IFA to their Platform account without moving the assets, that cannot be done with Towry.
    Mr Fisher needs to look closer to home before making accusatory statements about the rest of the indsutry. He is in no position of strength or authority indeed, quite the opposite could be true.

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