Employee benefit consultants are a decade behind wealth management IFAs when it comes to adapting their businesses to new regulatory and technological drivers says Novia chief executive Bill Vasilieff.
Speaking at a GBST Wealth Management seminar on the implications of the retail distribution review, Vasilieff, whose company’s platform will be white-labelled for the Aegon corporate wrap, also said the FSA was expecting providers to police implementation of adviser and consultancy charging by blowing the whistle on advisers abusing the new system.
Mark Loosmore, director of consultancy AT8 said in comparison to the individual platform market, corporate wraps and platforms were behind schedule, and some advisers feared the higher levels of interaction that implementing them would introduce.
Mark Thelwell, also a director of AT8 told delegates he thought the delay in bringing corporate wrap to market could be because early signs show it is not proving as lucrative as might have been hoped.
Vasilieff said: “The EBCs are probably 10 years behind where IFAs in the retail market are in their whole issue of changing the market and how they get rewarded. They are just starting to think about it.”
Loosmore said: “Corporate wrap is behind schedule. There have been high profile announcements of people coming to market that have been late to market. Corporate wrap is always the second priority and that is why it has been slow to market.
“The issues are different – people have started at a different point. People are trying to service a group scheme and sell extra product rather than really focusing on providing a valuable service there. And we also think advisers are quite scared of it – we have had advisers say to us ’but people will call us, and what do we say’. They are worried about being flooded with contacts from a group scheme.”
Thelwell said: “Some of these projects may be behind because they are not being as successful as originally thought at securing clients. Personally I am a great believer in worksite marketing, but I think corporate wrap has struggled to get penetration, and unless you have got clients that are going to drive revenue through it, you are probably going to delay the project. By contrast, in the retail market you have got people prepared to invest money and that is driving investment and expansion.”