All Wrapped Up

Since moving into the successful area of ‘Wrap Platforms’, Butcher & Moody have seen steady growth in their clients’ investments and pension funds. The MultiManager platform has given them the flexibility to move clients’ funds around quickly and easily, and has ensured these funds can remain better protected against financial downturns. Although the use of such ‘Wrap Platforms’ can be more common overseas they are becoming more available in the UK, offering investors more choice and stability. Interest in these products is now attracting the press as a recent article on FT.com illustrates.

On the rise of ‘Wrap Platforms’ the FT says:

“In the past 12 months alone, the amount of assets under management held via web platforms in the UK has grown from £25bn to £40bn, research from Defaqto, the consultancy, indicates. And advisers say the trend is set to continue this year as mainstream insurers such as Standard Life are marketing wrap platforms more aggressively to independent financial advisers. "This is going to be the year of the wrap platform," one analyst says.
"Wrap platforms are a gargantuan leap forward for both IFAs and their clients," says Justin Modray, an adviser with Bestinvest. "They allow advisers to focus on managing investments rather than having to compare legions of different product 'wrappers'."”

While investigating the versatility of the platforms the FT has found:

“At their most basic level, wrap platforms act as "fund supermarkets" allowing investors to choose from hundreds of unit trusts and other funds which can be "wrapped" into an Isa or a self-invested personal pension. But the most sophisticated wrap platforms enable people to manage the full gamut of permissible investments from offshore and onshore bonds and personal pensions to Isas and Peps via one platform.”

The FT has also investigated the widening range of platform suppliers and their products:

“A handful of providers are making strides by offering platforms to IFAs which permit investors to watch over the gamut of permissible investments from offshore bonds and self-invested personal pensions (Sipps) to Isas, Peps and stocks and shares. The lone exception not available is access to hedge funds, but some groups have signalled they may introduce them as part of their offerings.
The most sophisticated players in the market offering the full range of investments and tax wrappers from a variety of providers include Standard Life, Abbey Life - which offers its platform through the Sipp provider James Hay, Nucleus and Transact, two small independent providers which offer a full range of offerings, and Skandia/Selestia, which is working to combine its platform offerings with those of Old Mutual's advanced fund supermarket Selestia following Skandia's takeover by Old Mutual.
Less advanced platforms are offered by Cofunds and Fund Network, which started as fund supermarkets but are advancing to become full-service platforms. They are considered less sophisticated as they do not yet offer the full range of tax wrappers and still administer some products such as Sipps off their platform, analysts say.”

Also, the FT concludes:

“The maturity of the market for web-platforms in Australia and the US, however, offers strong evidence that they could be the way forward for IFAs in the UK.”

Having recognised the early potential of ‘Wrap Platforms’ and MultiManager Butcher & Moody are pleased with the growth and take up the products and look forward to further growth in the field, offering more versatility for their clients.

FT.com article quoted:
‘Wrap platforms’ will put it all in one place, by Ellen Kelleher, 9th February 2007.

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