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Wraps are on but few IFAs are ready

Under 20 per cent of IFAs have heard of wrap services despite many product providers planning to introduce them over the next year, according to JP Morgan FundsHub.

Wrap services, which bundle investment products so they can be managed as a single valueadded portfolio, are becoming increasingly popular with services such as Barclay&#39s Open Plan and Virgin One accounts.

The new generation of wrap services is likely to be offered by the major banks and insurance companies and will be more sophisticated, with a broader range of products and different tax treatments.

Within wraps, IFAs will be able to monitor and manage their clients&#39 total underlying assets across a range of products such as pensions and unit trusts as if they were part of a single pool of assets.

It is envisaged that IFAs will be paid a significant proportion of a flat percentage fee charged to clients for their ongoing asset management services.

But 77 per cent of IFAs are unfamiliar with wrap services, indicating there is a long way to go before they take off in the UK.

Of the IFAs who are familiar with wrap services, 39 per cent say they would be prepared to offer on-going asset management advice.

JP Morgan FundsHub chief executive Mark Lund says: “IFAs should prepare for questions from customers about wrap services, as we are confident that they will become as popular here as they are abroad. We believe that wrap services will help IFAs command much greater respect from their clients, because of their enhanced advisory and management role.”

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