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Two-thirds of consumers have never heard of wrap

Almost two-thirds of consumers have never heard of wrap and many who believe that they do understand the term think it relates to tax or a folder for holding investments in, according to research by Hargreaves Lansdown

The company found that 63 per cent of clients have not heard the term wrap used in an investment context and only 18 per cent are familiar with the term platform.

Fund supermarkets have apparently become a key part of investing, with 72 per cent of consumers familiar with the term.

Hargreaves Lansdown surveyed 500 clients about their understanding of technol-ogy terms. Despite the company’s own Vantage platform marketing itself as a wrap, many of the respondents who say they understand the term think it is related to a product’s tax status or simply a folder in which a range of investments are held.

Understanding of the term platform is even worse, with the majority of the 18 per cent familiar with the term saying it relates to mortgage company Platform Home Loans, having a safe foundation or base of core investments largely held in blue-chip companies or a stock and share trading platform.

Thirty-one per cent say they do not know how to best describe Vantage’s own service.

Senior investment man-ager Ben Yearsley says he is surprised at the level of confusion around the term wrap because the concept has been in the market for about seven years.

He says: “The industry clearly needs to do far more to explain what a fund supermarket or wrap account actually is and what the benefits are.”

FS3 director Mike Godfrey says: “Most clients do not know what the terms mean but it does not really matter. That is our job as advisers to explain it to them.”


Star treatment

David “Martin Clunes” Stewart from the Abbey press team (no, not from Eurythmics and, no, I never tire of that joke) got more than he bargained for when his esteemed colleagues in the press office mocked up a birthday card for him from the Dark Side no less. And a birthday belated happy we wish […]

BDMs could be unsettled in securitisation crisis

Top business development managers at mortgage securitisation lenders will be “sitting targets” for balance-sheet lenders if the current market conditions continue, says John Charcol senior technical manager Ray Boulger.He warns that many securitisation lenders are increasing rates and changing criteria to deter business after the fallout from the US sub-prime crash and their business development […]

Sesame wants FSA to help small firms with compliance

Sesame believes small firms need more guidance about what the FSA requires as scrutiny of their compliance standards increases.The network and support service provider says many of its advisers are getting a growing number of mystery shopping visits.Sesame says the regulator is also increasingly deploying different ways to increase its reach such as sending emails, […]

A switch in time

From my point of view, wraps are a necessity, both for me as an IFA and also as a consumer. Quite simply, they allow complete control.I have personally enjoyed excellent returns over the last few years with my own pensions run within a wrap.Once you have experienced what can be achieved by applying focus with […]

Investment clock economic update

In the latest Investment Clock economic update, Ian Kernohan, Senior Economist at Royal London Asset Management, discusses the implications of the US Federal Reserve’s recent hike in interest rates and upcoming French presidential election. The value of investments and the income from them is not guaranteed and may go down as well as up and […]


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