Two of the largest fund supermarkets will not rush to follow FundsNetwork’s lead and offer Exchange-Traded Funds and investment trusts, FTAdviser can reveal.
Both Cofunds and Old Mutual Wealth claimed that offering third party investment opportunities were not considered an immediate concern due to “low levels of demand”.
Stephen Wynne-Jones, head of marketing at Cofunds, said demand for ETFs and investment trusts was still very low – less than 3 per cent of platform assets under adminstration being typical via these investment types.
Despite this, he said Cofunds would look at developing a service, but added that the Legal & General-owned platform has “higher priority projects at the current time”.
His comments came as L&G announced a strategic review of its digital savings business, focused on “improving operational efficiency” at Cofunds.
Meanwhile, an Old Mutual Wealth spokesperson said: “While we continue to experience low levels of demand to provide access to investment trusts, we recognise there are advisers who would appreciate the additional functionality.
“We therefore expect to deliver access as part of our significant project to update our platform technology, which we are undertaking in partnership with IFDS.”
Ian Sayers, chief executive of the Association of Investment Companies, countered the platform claims by stating that demand for investment trusts has increased from both private investors and advisers.
“Since RDR, adviser platform purchases have trebled to approximately £600m a year and the number of advisory firms recommending investment companies has more than doubled to over 1,000,” he commented.
On Monday, Fideility’s FundsNetwork confirmed that from early December it will offer advisory firms integrated access to investment trusts from providers including Aberdeen, Baillie Gifford, Invesco Perpetual and JPMorgan Asset Management, as well as the five investment trusts from Fidelity.
It will also extend its range of ETPs on offer, comprising of a selection of exchange traded funds and exchange traded commodities available in the UK from the likes of ETF Securities, HSBC, iShares and Vanguard.
Kai Tang, director at employee benefits consultancy The EB Partnership, said he was in favour of having more ETF access. “There is a lot of debate over physical versus synthetic markets, but if the synthetic marketplace breaks down, this will affect the physical.
“We would fully support any expansion, as there is never any harm in being able to access more diverse forms of investment.”
lucinda.borrell@ft.com
