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Wrap still evolving

We have already seen many false dawns for the age of wrap and we really are at the very beginning still.

Many of the offerings are not complete and I am certain there is much more innovation and development just around the corner.

There seems to be much confusion in the adviser market as to what is wrap, where do supermarkets fit and what happens if they use just one.

IFAs need to step back from a lot of the noise out there and see wrap in its simplest terms, a wealth management admin platform. We have seen some fantastic innovation and evolution in the past 20 years, with quotation systems, back-office systems, online support from providers and now we have all the systems talking to each other to provide a streamlined process. Wrap is the next step.

What wrap will bring is the most sophisticated step yet, with the ability to manage a client’s wealth in one area with a series of tools that will enable the adviser to work with the client and provider in the most efficient way.

Where are we at present? We have many offerings that go part of the way to providing a degree of what advisers expect from a wrap.

Some very good technology underpins the models on offer but it still requires a lot of manual intervention by advisers and they do not offer the full functionality req-uired to make a wrap work.

Wrap is not just about technology. It does underpin the workings of a wrap but the ethos of implementing a wrap is far more. It means a very different working relationship between the adviser and the provider than the traditional model.

For wrap to be a success, the relationship must be far deeper and run more like a partnership than a distant manufacturer/distributor relationship. This change will be good for all parties but is going to be a wholesale departure for many on both sides of the fence and for some it will be a bridge to far.

So, with a change in ethos, technology and trust required, are we ready for wrap? There are advisers that have made the decision to run a wrap for high-networth clients where a functional wrap adds value to the relationship but use a fund supermarket for the transactional clients.

Fund supermarkets are fundamentally a different model to wrap and will continue to have a place in the market. They have provided a step along the chain but do not need to die out for wrap to be a success. They are another tool for advisers. We have seen several become akin to a third-party route to market for some providers but they are going to remain an excellent foil alongside the wrap.

Are advisers right to jump in and make choices now? The future is bright and I watch with a keen eye all the developments but too much is about to happen to say that we have the right model out there now.

Tim Sutcliffe chief executive of Pi Financial


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