The Institute of Financial Planning and Standard Life are in the formative stages of an initiative to help IFAs incorporate wraps into their businesses, which could result in IFAs moving to fee-based structures and becoming financial planners.
Nick Cann, chief executive of the IFP, says although companies like Standard Life and Abbey are trying to deliver wrap propositions, there is no focus on how such propositions can be transferred into the IFA’s business or explanations as to what they can deliver for clients.
Cann is therefore setting up meetings with Standard Life to discuss its involvement in the IFP’s “transition workshops” - six-day seminars focusing on the business change wrap platforms will bring and the service IFAs can deliver by using platforms.
One probable business change is IFAs will move from a commission to a fee-based service, as Cann says platforms enable IFAs to gather the assets of clients in one place thus enabling “structured payments” to be paid on a ongoing basis over a longer period.
Cann predicts another consequence of adopting wraps is IFAs will become financial planners, as he says they will “move up the curve to a professional financial planning service”.
In its transition workshops, the IFP and involved companies will explain the effects of financial planning on the IFA’s business, including consumers being charged for financial planning at the start and “enhancing the relationship”, adds Cann.
The IFP is looking for more companies to get involved in its programme and Cann says Abbey, Clerical Medical and Winterthur Life have all expressed an interest.
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