Wrap IFAs expect to migrate at least 80% of their customers, finds new
Dunstan Thomas survey
A telephone survey of wrap platform-using financial advisers, commissioned by Dunstan Thomas last month, reveals that nearly three quarters (73 per cent) of IFAs that are using wrap platforms today, expect at least 80 per cent of their customer-base to move their assets onto their selected wrap platform. Most firms expect to have completed migration work by the end of 2010.
The main criteria for selection of a wrap platform is the quality of service being offered by platform providers (53 per cent of the sample saw this as their most important criteria). The second most significant criteria for wrap selection was the breadth of investment choices being offered (26 per cent said this was the key criteria for selection). Nearly three quarters (73 per cent) of firms have offered clients’ investment trusts for the first time as a result of wrap migration. The offer of an unbundled and transparent charging structure was the next most important issue for wrap platform users (20 per cent).
Difficulties involved in migrating assets onto wrap still remain with the movement of legacy assets from life assurers’ being cited as the primary frustration (by 53 per cent). The second largest frustration remains the fact that several platforms do not universally accept in specie transfers (26 per cent).
The majority of IFAs agreed that moving onto wraps had enabled them to offer a more holistic service to their customers whilst cutting their administrative burden significantly.
James Roberts at Partners Wealth commented on the benefits to his firm: “Wrap platform migration has enabled us to lay down and communicate our service proposition to clients very clearly. We now guarantee an annual review meeting for all wrap clients. We also offer six monthly reviews, combined with clearly defining all clients’ risk profiles and offering continuous, even daily, valuations via our website which is powered by one of the platforms.”
Andy Jervis of Chesterton House, explains: “Wraps have enabled us to pre-agree Client Remuneration based on a simple and understandable charging structure and to only charge for service and expertise rather than to execute a transaction. We can now tell the client exactly what percentage of Assets Under Management they are paying us, the wrap and the fund manager, annually and per transaction. This kind of transparency also enables us to be both more flexible and more consistent with our charging.”
Christopher Read, chairman, Dunstan Thomas, commented:
“It is quite clear that the converts to wrap platforms are already deriving considerable benefits in terms of the service and range of broadening investment choices they’re able to offer their clients. The fact that the majority of their client-base is happy to migrate their assets to their adviser’s-selected wrap reveals a great deal about their increasing success.”