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Will IFAs take the Wrap?The challenge
A Wrap (services and platforms enabling individuals to monitor all their finances and assets) landscape is complex, its challenges similar to those facing the NHS. Both have the massive task of extracting legacy data, for consolidation, via disparate platforms, operating systems, and business processes. The service architecture is no longer concerned with activity within a provider’s own boundaries. Interfaces are needed, with systems and processes beyond a single organisation’s direct control, plus multiple systems and operations managed by several outsourcers.
Where will responsibilities lie? How will products be moved between providers, giving customers access to ‘whole of market’, as the FSA dictates, and address complex tax issues? Who owns and protects data? How will competitors work together? What about IFAs access to ‘closed book’ systems and how easy will it be for them and their systems to operate in this new environment?
The opportunity
Fund managers will be capable of providing direct investment vehicles, bypassing traditional product providers, so too will financial organisations with a large client base. They can both sell direct and remove the middle man.
For most organisations, building a brand new Wrap platform is not the right answer. Access to legacy data will be make or break; if an adviser or client cannot get an holistic view of a portfolio, enabling analysis and advice, what’s the point? Then there are extranets and the IFAs own CRM systems to consider.
The approach
Careful and pragmatic technical design, clear roadmaps and an alignment of strategy with the IT service delivery is needed to reduce risk and manage cost. Re-use, practical prototyping and review of the end-to-end landscape - conditioning for success, is the way forward. Will Wraps succeed? Who can make it work? Is it the end of the road for IFAs as we know them? The jury is still out.