Wrap should not be considered a threat because it will help drive client interest in investment and help advisers work more efficiently, says Baigrie Davies director Amanda Davidson.
At a Money Marketing Live panel debate on the future of the IFA market, Davidson said advisers should not be concerned that wrap will put too much control in the hands of the client.
She said: “It empowers them in terms of knowledge and understanding but there are still many clients who want a bit of a second opinion, a comfort zone.
“Asset allocation and decisions over performance cannot be carried out by a piece of technology – you need the advice.”
Informed Choice Nick Bamford said it is not IFAs who are under threat from the growth of wrap but traditional product providers.
Bamford said: “If you had to be anywhere right now, I would be a directly regulated small to medium-sized organisation. But as for the product providers, the writing is on the wall. Providers are losing money hand over fist and the old models are finished.”
Worldwide Financial Planning managing director Peter McGahan said the growing uptake of wrap could spell bad news for back-office software providers unless they can adapt to find a place in the food chain.
McGahan said: “Back-office systems as they currently stand will go out because they are designed towards the current trend for transactional product sales. With wrap, you have a seamless piece of technology from start to finish with no need for manual valuations.”