View more on these topics

Wrap firms warned that registration charges could cost them the market

Extra charges on wrap platforms could threaten the development of existing propositions and see new entrants dominate the market, according to leading technology experts.

Retail financial services consultancy Cydonia director Allan Greenshields says most of the companies building wrap platforms are looking at building re-registration charges into their initial costs.

When an IFA puts a client&#39s investments on to a wrap platform, they have to check which investments are already registered with an asset manager. Most existing platforms will charge a consumer to re-register these investments and this transfer can then be subject to capital gains tax.

The admin costs levied for the transfer of products such as Sipps, Isas and bonds can range from £10-£25 and are incurred by third-party administrators.

Greenshields believes the new wraps could end up dominating the marketplace if existing platforms fail to recognise that, in order to attract investors, they will have to absorb more costs.

Industry experts such as Financial Technology Research Centre director Ian McKenna believes Fidelity is setting a benchmark by introducing an incentive scheme for advisers and consumers to register assets on their platform.

He says the move indicates that some players are actively considering ways of attracting investors but believes they need to go one step further to ensure that investors can see where they will recoup the cost of the charges through savings.

Greenshields says: “The risk is that clients will see these extra costs and decide that a wrap is just not worthwhile. There are currently not enough benefits for an IFA to absorb this cost either.”

Recommended

Myners moves in at M&S

Former Gartmore chairman and the Treasury&#39s favourite reviewer Paul Myners has been named as the interim chairman of Marks & Spencer following a board shake-up which sees chief executive Richard Holmes also replaced. Myners, who already sits on the retailer&#39s board as a non-executive director, now becomes a key member of its so-called &#39dream-team,&#39 alongside […]

FSA opening up to IFAs with regional surgeries

The FSA is going on the road in its first series of regional visits to IFAs which it hopes will make it appear more approachable. First port of call is Gloucestershire, where six members of the FSA team will answer queries from IFAs. IFAs will be able to book 45-minute surgeries to discuss issues. The […]

Bankhall takes over lead

Sesame has been surpassed by long-time rival Bankhall in terms of number of RIs. Durlacher says Bankhall passed Sesame last year, reaching 7,400 members if Point One, its non-regulated network, is included. This compares with Sesame&#39s total of 6,400 if both its regulated and non-regulated businesses are included. It says there is still a huge […]

Chartwell launches new website

Chartwell Investment is launching a new website . The site designed with Plum Digital media will include commonly used products, Chartwell services, a fund supermarket and free guides on a range of topics.

Boosting our annuity strategies

Targeting annuity purchase in lifestyle strategies isn’t anything new but we’ve just lifted the bonnet and injected an enhancement shot into the end-point of these solutions. The recent volatility has shot short-term volatility into equity markets and painted a very turbulent backdrop but we’re also equally faced with a stressed fixed interest environment. This can […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment