Solving the puzzle

Wrapping up a range of different products in an RDR context makes remuneration of providers and advisers a complex puzzle. Jenny Keefe untangles where revenue will be driven


Increasing funds under management may be the main attraction of corporate wraps to advisers. But an assets under management model may not sit well with the regulatory framework created by the Retail Distribution Review (RDR), warned delegates at last month’s Corporate Wrap Forum.

In a poll at the Forum, The Future of Corporate Wrap, delegates were unanimous in singling out increasing funds under management as the most significant business driver for providers launching corporate wraps.

But a funds under management model for advisers drew a sceptical response from advisers, including Jonathan Phillips, head of consultancy solutions at Bluefin, who cautioned the industry against “mob thinking”.

He said: “Everybody’s heading towards funds under management, whether they can make money out of it or not. Traditionally, we’ve probably just handed over the fund, but now we think that we can add value because we have our own views about investment and because we think we can understand the customer better. I think there are definitely some intermediaries who would be happy for providers just to do admin.”

“We’ve been seduced as an industry by funds under management. Everyone is doing corporate wrap and they are trying to make it look like it works, without necessarily asking any decent questions” Steve Herbert