If you are choosing a platform as part of a new or improved business plan, service strategy or on a client-by-client basis, you need answers to a whole series of questions before making a decision. You need to be sure that the wrap you choose meets the needs of both your client and your business model.
Defaqto/Find.co.uk has put together a series of questions. If you can get answers to these questions, you will be in a strong position to make the right decision.
- Is the use of a platform in the best interests of the client?
- Do the platforms on offer provide what my client needs and at the same time enhance my own business capabilities?
- What are the alternatives?
- Will using a platform, or platforms, enhance the value of my business?
- Will my client be persuaded of its value?
- Will it improve my relationship with the client to our mutual benefit?
- Will the regulators be satisfied that my choice is in the best interests of the client?
- What are the administration services offered, for instance, commission accounting, policy tracking? And do they improve on what I currently have in place?
- Do the facilities and investment tools on the platform mean an improvement to my current investment decision making?
- Where can I achieve economies of scale, for example, bulk trading and standardised portfolio management?
- Will it facilitate my preferred method of remuneration?
- How will benefits to the client manifest themselves? For example, will the client benefit from less paperwork, improved service, standardised, consistent and regular reporting?
- Will the time saved result in improved service such as client management, tax planning and wealth accumulation?
- If there are additional costs to the client, would they consider this value for money?
- Are the tax wrappers available sufficient to meet the clients needs?
- Should I consider using more than one platform, and segmenting my clients accordingly?
- Is there enough investment choice?
- Is there too much investment choice?
- Does it really matter if there is no access to some of the more specialist types of investment such as ETFs, direct equities, hedge funds, and so on?
- Is this facility sophisticated enough?
- What doesn’t the wrap provide?
- Is there a ‘must have’ feature or service not included, for instance capital gains tax reporting, white labelling and so on.
- Am I comfortable with the answers when asking about the development of additional tax wrappers, asset availability, services and that any promises made are real and achievable?
- Do I think that the support from the platform provider is sufficient to meet my needs?
- How much does it cost (platform, products, funds, re-registration?
- The costs of the platform may change depending on the amount invested and the length of time the client subscribes to it. Is this right for my client bank profile?
- Should I consider using more than one wrap?"
- Am I satisfied that use of the platform won’t jeopardise my independent status?
- What is the policy regarding re-registration when adding a client to the platform?
Make sure you are fully aware of the process, costs and rules regarding exiting the platform. These are services and there may come a time when you feel the platform of your choice is no longer delivering the service you require.
Other questions to ask:
If adopting a platform wholesale, what help is available from the provider in terms of implementation?
Are there dedicated teams/helpdesks?
What is the security hierarchy? Does it fit my set up? (You may require different levels of access for the business and for clients).
Given that it is a developing market, and that technological developments tend to be expensive in this field, are you confident that the provider has the backing to keep pace with new developments.
White labelling may be important to you if this is integrated into your business. Given that the platforms are investment oriented, you may want to ask:
Is there compatibility with my back office system in terms of downloads, so that aggregation of clients’ financial data can be facilitated?
Are there savings to be made for family participation (ie one set of fees)?
We believe that if you obtain satisafactory answers to all these questions, you will be in a strong position to make an informed decision about the use of wraps.
Last edited March 2007