IFAs are unsure as to whether corporate wrap will be a useful tool in their businesses, according to research carried by Defaqto.
Six out of 10 IFAs currently have no idea whether corporate wrap will have any impact on the employee benefits market, according to a recent survey carried out by the research company. Just 24 per cent thought corporate wrap would have an impact on benefits, with 17 per cent thinking it would not.
Asked whether they thought corporate wraps would eventually replace flexible benefits platforms, ’don’t knows’ were again the biggest category, at 63 per cent, with 20 per cent agreeing and 17 per cent disagreeing.
But 47 per cent of respondents said corporate wraps can be complementary to flexible benefits platforms, just short of the 49 per cent who did not know, with 4 per cent saying they cannot.
Defaqto says the figures, which come from a survey of attitudes to the wider retail platform arena, show the low level of understanding of corporate wrap outside the specialist corporate intermediary community.
It says the data reflects the need for corporate wrap providers to do more to raise awareness of their products if they want to capture business from generalist IFAs who advise some employer clients on group pensions and other benefits
Fraser Donaldson, insight analyst – funds, at Defaqto says: “There are a high number of ’don’t knows’. This is perhaps because most advisers see this as a solution that the platform providers and employee benefit consultants will take straight to the workplace. More likely though is that they just don’t know enough about it, how it might work, and how it may affect them.
“The prospect of corporate wrap has been with us for a couple of years now so it does seem that the platform operators are going to have to work much harder to educate the industry on how it can benefit all the links in the distribution chain.
“It has taken industry practitioners the best part of 10 years to be persuaded of the benefits of platforms and even now there are still strong reservations by some advisers of their value. This makes ’cold-calling’ the employers with this new technology quite a difficult task, at least for the foreseeable future.”