The persistent focus by some platform providers on IFA ownership doesn’t address the real conflict of interest in the wrap market according to the IFA firms that use and own Nucleus.
The 48 firms, which collectively represent more than 230 high quality IFAs with over 7bn under advice, wholeheartedly welcomed the FSA’s recent commitment to a principles-based approach for regulating the platform industry but believe the subsequent focus by some provider-led platforms around equity ownership is a smoke screen designed to take attention away from the real conflict of interest in wrap – transparency.
The IFAs believe rather than provider platforms questioning advisers over ownership, advisers should be seeking clarity from provider platforms on issues such as the disclosure of fund management rebates to clients, interest earned from cash deposits relative to the interest paid to investors and the free movement of assets between platforms.
Founding Nucleus IFA and Advisory Board member John Moore of Central Investment Services comments: “The debate around equity ownership indicates to me that some providers still prefer a ‘smoke and mirrors’ approach to the provision of financial products that allows them to control the overall pricing of the proposition to the detriment of the client. As high quality advisers we will continue to act in the best interests of our clients and offer the best solution to suit their needs in a truly transparent way. If the most appropriate platform to support us in this quest happens to be IFA owned then so be it.”