UK - Wrap accounts will administer some £150bn worth of UK assets in five years, new research shows.
A report by Datamonitor reveals that the technique, which enables IFAs to view their investments from the one internet-based platform, will increase in popularity by 40% by 2008.
The flexibility which wraps provide has made them very popular in the US and Australia where they are worth around £400bn and £125bn of assets respectively.
Pension fund valuations, transactions and portfolio rebalancing can all be done from one screen, 24 hours a day – increasing operational efficiency and reducing administration costs.
Datamonitor financial analyst Alan Shields says the speed with which the wrap market develops will depend on the implementation of:
- Ron Sandler’s recommendations on commission bias. - The government’s proposals on pension simplification. - The Financial Services Authority’s depolarisation proposals.
Shields said: “At present, there is a commission bias – banks are only allowed to sell the products of one provider, and pensions products remain complex and unmanufacturable for wrap platform providers.”
He added: “The regulatory changes will enable wrap accounts to remove the reliance on commission by offering a flat fee that is a percentage of assets under management.”
A suite of liability driven investment (LDI) indices has been launched by STOXX and RiskFirst to aid trustees and consultants select, monitor and challenge managers.
British Airways and the trustees of one of its pension schemes are set to argue over the purpose of a pension scheme, leading to an impactful judgment for DB pensions. James Phillips explores the issue
Bank of England governor Mark Carney has said there is still a lot of data to consider before the Monetary Policy Committee (MPC) can decide when to next hike interest rates.
Savers are not squandering their tax-free lump sums under Freedom and Choice but are taking a more cautious approach to retirement, according to Prudential research.