New Model Adviser®

23 June 2008 | citywire.co.uk26

Adviser comment

Adopting a passive investment style was the catalyst for Hertfordshire-based adviser Simon Brown to move to Seven

Investment Management’s (7IM) Tethys wrap.‘We used things such as Cofunds and

FundsNetwork, but once we made the choice to go passive, we needed a proper institutional platform,’ said Brown, partner at BPH Wealth Management.

Making the shift three years ago, Brown wasn’t confronted with the array of wrap providers that are now in the market.

He said the choice was between 7IM, Transact and a recently-launched Standard Life wrap.

He said that Seven’s lack of ties to a life insurance provider counted in its favour.

‘Most of the wraps come to the business from a provider perspective, but Seven came from an investment point of view,’ he said.

Brown praised 7IM’s ‘simple’ charging structure, which remains at 25% however much a client has on the platform.

But he said the settlement process with clearing service Pershing, which takes one day for equities and three days for unit trusts, sometimes caused administration problems, although he claimed the process had improved.

He was also enthusiastic about the choice of investments on 7IM, claiming that even other open architecture wraps couldn’t compete with the range of investments it could hold, pointing to the likes of US iShares as an example.

‘We try and run fairly simple portfolios, but we wanted to have a platform that would give us access to those sorts of things – we can virtually buy anything in the world,’ Brown said.

WRAP FACTFILE

Seven Investment Management is selective about which advisers to let on its Tethys

wrap. But for those fi nancial planners who make it on board, the charging structure and

investment choice are key features.

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Adviser Support

Individual users 400+

Adviser fi rms 82

Assets on the platform £300 million

Who are the backers? Seven Investment Management Limited, Zurich Financial Services, AEGON

Products and Funds

Funds available 1200+

Do you offer both retail and institutional fund classes?

Can you trade and hold alternative assets? Actual alternatives (eg, physical gold) – no, but can hold and trade any listed security

What onshore wrappers are offered? Zurich Sterling

What offshore wrappers are offered? AXA, Friends Provident, Royal Skandia, Scottish Equitable International

What other wrappers are offered? Sipps, SSASs, trusts, charities, investment accounts ( joint, single), ISAs, PEP transfers, corporate accounts

Do all of the wrappers offer whole of market investments?

How many funds are the platform providers own funds? None

Tools

Fact fi nd Financial goal setting Risk questionnaire Risk profi ling Fund selection tools Model portfolios Client summary of assets/risk/choices Rebalancing

Adjustment of portfolios CGT reporting

Other: Consolidated Tax Vouchers

Charges

Bundled or unbundled Unbundled

Full rebates from the AMC charge?

Initial No charge levied by 7IM but IFA can charge an initial fee up to 3%.

Do you levy switching charges? If so, what are they? £25 per trade

What are the wrapper charges? Does the wrapper charge decrease with increased assets? There are no wrapper charges but there is a 0.25% per annum platform fee, deducted quarterly in arrears. Any adviser trail taken as a platform fee (not the trail taken from funds) is added to this and deducted at the same time.

Additional wrapper charges for more complex wrappers Not unless levied by the wrapper provider – 7IM do not charge any wrapper fees

Dealing charges for direct equity and fi xed interest investment? £25 per trade

Interest rate paid on the cash account? Base rate minus 0.75%

Online functionality

Is all business submitted and carried out online or is there a wet signature requirement? Signature required on account opening forms

Research tab with investment data and news etc?

Are forms pre-populated?

Can clients view their holdings online?

Can advisers track business in progress?

Can advisers create ‘to do’ lists

Other front offi ce additions? Viewing by advisers of fees and rebates due to them

Legacy and re-registration

How long does it take to send legacy data out to other platforms? If we have an electronic link to the other platform, daily updates can be arranged. If we do not have an electronic link data takes 24-48 hours

Is it possible to include new business written outside the platform on the platform? Due for delivery in Q2 2008

Do you allow reregistration on and off the platform? Yes.

Links

Do you have any links to other platforms?

Links to technology companies’ front and/or back offi ce systems? IntelliFlo, Quay Software, 1st Software.

Transition to the new model

What measures are in place to ensure the platform helps advisers to move to a fee-based business model? Viewing of fees due online

Do you give advisers the option to take less initial commission and more annual trail or determine their own remuneration with clients? Yes

How and when is annual trail paid? Trail is paid quarterly in arrears based on the size of the client portfolio. Any initial fee charged by the adviser is paid the month after the account is fully opened.

SevenInvestment Management