BT offers wrap service to independents for first time
BTFinancialGroup’s uneasy relationship with master trusts and wraps has taken another turn with news it is to offer its wrap service directly to advisers for the first time.
It is the first time BT has offered the group’s wrap account directly to independent financial advisers, rather than via a service badged through a dealer group. It effectively transforms BT from being a wrap account wholesaler to a retailer.
BT Portfolio Services’ badged wrap, or BT Private Label wrap, is one of the fastest growing portfolio administration services on the market, now offered through 1,600 advisers in 24 dealer groups with more than $4 billion under administration. Alongside Godfrey Pembroke’s OneSource wrap, BT pioneered wraps in Australia when Lonsdale badged its service in 1997.
But BT’s involvement in the portfolio administration market has not always been so positive. In July 1993,Money Managementquoted BT retail boss Terry Power saying BT wanted to remain “retail managers of retail money, not wholesale managers of retail money”.
However, Power said last week he could not understand why BT was portrayed as anti-master trusts. He says BT was actually one of the first fund managers to list their funds through master trusts.
“What we were concerned about was the robustness of the systems. Our concerns were vindicated with the troubles experienced by the Excelsior master trust,” he says.
BT head of retail Rob Coombe says the development of the BT Wrap has been in the pipeline for 18 months and has been developed along the lines of the badged wrap.
He says the product is more suited to smaller, independent financial advisers and could be used in the provision of services to those clients managing their own superannuation funds, as the compliance, administration and trustee issues remain with BT.
The BT Wrap also has a reduced managed funds list, numbering 140, down from 300 in the private label service, and a differing fee structure. Adviser fees will be based on a tiered structure dependent on funds invested through the platform, with the range set between 0.975 and 0.1 per cent.
Head of portfolio services Bill Wawn says the driver for the new product was demands from independent advisers and boutique dealer groups.
Coombe says about 100 independent planners will take up the service before the end of the year, adding more than $100 million to funds under administration.
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