Wraps face major challenges, claims Skandia
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Skandia has claimed the platform consultation paper published by the Financial Services Authority is a “blow” to wrap platforms, with significant challenges.
Peter Mann
The group called for backing of its proposals for unit rebates instead of cash, which looks set to be banned by the regulator.
Peter Mann, chief executive at Skandia UK, says: “Customers use platforms to invest in funds not cash so it is logical that any discount that the platform can negotiate for the customer should be paid into their funds rather than a cash account.
“Most wrap providers seem to have been more preoccupied with changing the regulator’s mind on this issue than building an alternative solution.”
“Wraps now face a couple of major challenges that they were hoping to avoid. Firstly, the liquidity created by cash rebates in customers’ cash accounts has been removed which is a significant change for their customers Secondly, they are going to have to upgrade their systems to facilitate unit rebates and unit deductions to pay adviser charges.”
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