IFA guide to wraps

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?

TIP

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.