Investment trusts on Cofunds would help: Chelsea

Darius McDermott, managing director of Chelsea, said the firm had “never been anti-investment trusts”, but because the firm uses one platform provider, Cofunds, none of its clients could buy them from Chelsea.

He said: “We think investment trusts are a natural extension to the fund base, but we need a platform provider to hold them.

“Cofunds provides great infrastructure for us, but it will not hold investment trusts.

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“I asked them to bring trusts on-platform. We are a big client, and if Cofunds listens, it would be a nice opportunity for us.”

He said some of the dividend streams from investment trusts have been very good – some have paid out a dividend every year for 46 or 47 years – and the underlying managers are often talented, running unit trust versions of their investment trust funds consistently well.

Mr McDermott added: “We are excited about the possibility that Cofunds could widen its offering, but I don’t think we will see this for another 12 months.

“The attraction of investment trusts is not because of their historically low price – with the creation of the clean fee share classes, many unit trusts are cheaper than ever before – but we would like to be able to research Iinvestment trusts as part of a wider offering to our clients.”

This comes as figures from Legal & General’s full-year results revealed that net inflows for Cofunds in 2013 were £7.9bn.

The amount refers to net inflows for L&G’s platform business, most of which is from Cofunds, which the life office bought in May 2013.

Total net inflows for the full year for the platform will total £10.1bn.

Last week, independent consultancy The Platforum revealed that many of the largest platforms in the UK still fail to provide adequate choice and diversification to advisers, especially post-RDR.

Stephen Wynne-Jones, head of marketing for Cofunds, said: “An increasing number of our clients are telling us they would like to see more non-mainstream investments on Cofunds, but they are still in the minority. These types of investments are in the planning mix for future development, but we have no timescales to confirm yet.”