Barry's blog
In speaking with a number of advisers recently it's clear that an increase in wrap research is now being carried out following the latest RDR papers which were published in the spring. Not only are the due diligence questionnaires we regularly receive here at Nucleus HQ becoming longer and more detailed, they are also beginning to focus on much wider elements of the wrap proposition.
Previously the questions would centre principally around understanding the charges, functionality and availability of assets whereas now there is, rightly, also a strong focus on the financial strength of the wrap operator and their readiness to meet the not inconsiderable challenges of RDR.
One area, however which still doesn't seem to be receiving much attention is the support provided by a wrap operator to assist an IFA firm to embed their platform proposition within their business. This is perhaps understandable for firms who have never adopted a wrap before but for those who have, they will surely understand the complexities of adoption and the negative impact it can have on a firm if this doesn't go smoothly.
In many senses this isn't so much about 'implementation' as 'integration'. In the context of adopting a new technology 'implementation' suggests simply providing access to the platform and system training whereas 'integration' should focus on your wider business requirements and seek to understand all the areas which will be impacted by the adoption of the wrap.
Most businesses are too busy with the day to day issues of dealing with clients and won't normally have a dedicated project management resource to oversee the myriad of changes that adopting a wrap may bring. These could include redefining roles of employees within the firm as well as re-engineering your overall client service proposition.
If you are currently carrying out platform due diligence it's important to understand what support a wrap operator can provide to assist you in the process of integration. It will also be worthwhile querying the experience they have had with businesses of a similar size and shape to your own and asking what recurring issues tend to arise.
Ultimately the adoption of a wrap platform is not about the technology but your business, your client service model and your investment proposition. Any wrap provider that doesn't demonstrate an understanding of this point probably doesn't deserve to get beyond the questionnaire stage in your due diligence process.
Barry Neilson
Business Development Director
Nucleus Financial Group Ltd
Article last updated: Jul 21, 2010
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