Tide turning as another platform mulls structured products

Alliance Trust Savings could become the latest platform to offer structured products to advised clients, after its head of proposition revealed to FTAdviser that it was “investigating” including them as an investment option following a relaunch early next year.

As part of its deal with online trading technology provider GBST to revamp its platform proposition for intermediated business, Alliance Trust Savings is looking into for the first time including structured products, which it currently cannot support due to technical “complexity”.

Sara Wilson, head of platform proposition at ATS said that this is “something we are investigating at the moment.”

At the moment Ms Wilson said that the platform only offers standard investments and this was in part due to the pact that a lot of structured products are deemed to be complex from a regulatory perspective, particularly with regard to the European rules on collective investments.

Ms Wilson said that at present, a huge amount of manual intervention would be needed to support structured products on the platform. She added that most platforms similarly do not currently offer structured products “due to the complexity of the products”.

ATS’ potential move towards structured products follows Investec Structured Products claiming to be the first to offer automated dealing of structured products to wraps and platforms after partnering with transactional network Calastone and Novia Financial.

Investec will now offer a suite of continuously available structured deposits and structured investments via the networks in an effort to build a wider audience.

Most platforms give short shrift to structured products, which are typically based on complex derivatives and have only a limited secondary market which makes them largely illiquid, with only a small number of more bespoke wraps offering access.

Ian Lowes, managing director of Newcastle-based Lowes Financial Management, said: “What Investec has done with Calastone is a positive move.

“The natural thing to follow is Morgan Stanley and Barclays. They will be the first three to move in this direction and will make other providers wake up to this and follow on.

“If providers don’t make it easy for faciliatators to transact then its going to make the platform market accept they are not very complicated things to transact. The platforms don’t care where the money goes as long as they are getting paid - they were interested in getting AUMs.”

Elsewhere, as the “replatforming” takes place, Alliance Trust said it would open up model portfolios and begin working with discretionary fund managers within its adviser channel. It will look to open six portfolios initially and to grow that figure over twelve months to somewhere between twelve and fifteen, Ms Wilson said.

ATS’ assets under administration currently stands at around £6.2bn. In the summer the firm said it had more than £1bn in intermediary assets, up 400 per cent from a low base last year as it continues a plan to grow intermediated business to £3bn by 2016.