The wrap account will enable intermediaries to manage, transact and value traditional life and pension policies together with a wide range of unit trusts, OEICS, direct equities and gilts in various tax wrappers. It will remove much of the administrative burden of dealing with multiple product providers and fund management groups, for example by providing a single commission statement, which reduces costs and frees up time for the adviser to focus on issues such as revenue generation, client service, segmentation and customer attitude to risk and asset allocation.
It is intended that the wrap service will be formed by integrating the market leading quotation and transaction services of The Exchange’s Exweb portal, which currently has approaching 18,500 registered users, with the Fundsdirect platform. This platform provides dealing and settlement for all UK Equities and over 1,500 funds from 80 investment companies. These investments can be held inside and outside of multiple tax wrappers, including ISA, PEP, Personal Pension and SIPP.
The service, which will be available to all users of Exweb and Fundsdirect’s Adviser Platform, represents a natural strategic development for both. By adding access to funds, equities and various tax wrappers to its platform The Exchange is further extending the range of services available to its users. This complements the infrastructure that The Exchange is already putting in place for transactions and valuations of life and pensions products within Exweb Gold, the next generation of Exweb which will be fully integrated with the Fundsdirect platform.
The integration of Fundsdirect’s platform with Exweb facilitates the automatic transfer of client details between the wrap account and other Exweb services and, as well as being able to process transactions online, the wrap service will also have the capability to accept paper instructions via traditional post.
These arrangements are consistent with The Exchange’s strategy of providing innovative, market-leading products by continuously enhancing the range of services available to IFAs via Exweb.
Sean Ewing, chief executive of Fundsdirect, comments:
“The combination of Fundsdirect's open architecture and multiple product proposition (inclusive of all related tax wrappers) integrated with the life and pensions functionality of Exweb and Exweb Gold offers huge benefits to an intermediary. It is a key step forward in automating the trading and operational processes that have historically restricted the operational efficiency of IFAs. IFAs will now be able to make a seamless migration to a new “Retained Adviser” model built on assets under management, generating significant recurring income. This is a complimentary integration leveraging the collective strengths of both organisations.”
“Evidence from other countries suggests wrap accounts are set to have a major impact on the UK financial services industry. The service we are developing with The Exchange will, for the first time, give IFAs an appropriate mechanism through which to transfer and migrate much of their back office requirements to a platform which will administer a full range of financial products from multiple providers on behalf of their clients. The Exchange was our natural partner as we looked to launch this innovative service given its unrivalled penetration of the IFA market via the Exweb portal and our collective vision of a fully integrated multi product solution.”
Jay Swanston, head of wrap at The Exchange, comments:
“This is the first wrap offering of this kind that really meets the needs of the advisers. It creates a single service that allows them to effectively manage all of their clients’ investment assets. In markets such as Australia and the US, where wrap accounts are more established, as much as 80% of all new investment monies are placed into these services by advisers. In the US alone funds in wrap accounts stand at around $750bn and we believe it is an area that is set for expansion in the UK. Fundsdirect is the natural partner for us as it shares our vision of taking the best practices from the US and Australia and combining them with Exweb to create a solution for the UK.”
