Return of the wrap

Financial Adviser

When platforms – aka wraps – first arrived in the UK in the early 2000s they were heralded as the catalyst that would bring about an investment revolution.

Things started to get interesting following the purchase of Transact by American Express in 2003 and the launch of Abbey’s wrap around the same time.

But it took a few years, and the launch of adviser-owned independents such as Nucleus, for wraps to really take off.

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Then the Retail Distribution Review happened.

In the business world, though, if a particular model of doing things is around long enough it will eventually witness consolidation, whether it is a success or a failure. And so it appears to be the case for platforms, which have, on the whole, been a success.

Standard Life’s agreement to buy Axa’s entire issued share capital of Axa’s Portfolio Services – the company trading as Elevate – is being seen as a landmark event in the evolution of the wrap.

The agreement, which was announced last week and is still subject to regulatory approval, will add £9.8bn in assets under management to the Standard Life platform and bring the total assets under administration to £36.4bn.

The sale of Elevate was not unexpected, as there had been speculation around the sale of Axa’s platform for months after it failed to meet targets.

And as the implications of the RDR continue to reverberate many industry experts believe more of this sort of thing is coming.

Consolidation has long been part of the ebb and flow of financial services, and it appears that platforms are now having their time.

Let’s hope advisers are adept at dealing with change.