Corporate wraps 'no threat' to adviser businesses

Corporate wraps will not pose a threat to adviser firms but will instead complement their services, according to Friends Provident.

Announcing it will launch a corporate wrap platform next year, Friends Provident insists it will not seek to bypass advisers with the new initiative.

Following much speculation, Friends Provident confirmed it will be launching a corporate platform, working in conjunction with technology specialist FNZ, at some point in 2010.

The platform will allow employers to offer pensions, group SIPP and non-pension savings products such as a corporate ISA.

An online trading facility will be included, along with financial education tools, and Friends Provident aims to deliver an individual SIPP wrapper in the future.

Speaking to Professional Adviser in June, Chris Read, chairman of technology firm Dunstan Thomas, said UK life companies will increasingly look to target employers directly with corporate platforms, while independent wrap firms focus on the IFA market.

However, Simon Clamp, managing director of Friends Provident, says his firm will continue to distribute its products through advisers.

"We are responding to developments in the corporate benefits market, where employees increasingly want to be able to view their benefits online in one place," he says.

"Advisers can be a part of that and we only distribute our products through intermediaries and have no plans to go direct."

Amanda Davidson, director at Baigrie Davies, says the growing presence of wrap is unlikely to have a major effect on adviser business levels.

"I don't think the expansion of platforms into the workplace will have much effect on individual advice. A client has to want advice and see the value of it, and if they do then they will seek advice regardless of whether they can access a corporate platform," she says.

Meanwhile, FNZ believes the corporate platform will actually create more opportunities for adviser firms.

"Much of the employee benefits market is already serviced by corporate adviser firms, and a corporate platform presents a huge opportunity for them," says Adrian Durham, group CEO of FNZ.

He says corporate wrap makes it easy for advisers to identify employees who would benefit from individual advice and they can then easily bring their portfolio together in one place.