There is no ‘off the shelf’ wrap platform: different markets and clients require different approaches in terms of legislation, regulation, products, the capacity of front end tools and distribution. Wraps are developed to suit differing market segments and usage.
The latest type of wrap package includes tax efficient management of new and legacy investments, asset classes and product types. In effect, it is a wealth management solution that automates settlement processes and allows the individual consumer to benefit from indirect participation in wholesale financial services markets.
Wraps offer easy linkages between different types of financial wrappers, benefits in terms of scalability and the ability to absorb product and regulatory innovations. Wrap platforms allow everything in a portfolio to be bundled around a central technology engine: buying, selling, income trading and reconciliation are concentrated in one place.
In respect of individual wraps the cash management account, or hub, can also provide traditional banking facilities such as a cheque account or a credit card. Investors are able to see and manage all of their assets and financial transactions online. For the IFA a wrap offers an all encompassing package that optimises the benefits of master trusts. Wraps allow IFAs to access a wide range of investments, provide easy and centralised reporting and obtain more cost effective administration. Wraps providers see them as the means of moving away from traditional high-commission business to fee-based relationship management with clients.
We see different types of wrap developing over the next five years as:
- investors become more demanding of financial services entities who have to meet job mobility requirements
- the employer becoming a facilitator of financial services
- there is more demand to have a holistic picture of an investor’s financial position.
