Adviser concern on Macquarie platform demise

An IFA has expressed concerns the closure of Macquarie’s wrap platform could affect his relationship with new clients.

Macquarie announced today it will shut its wrap platform in the UK, along with adviser business transformation service Veracity.

The platform will close down at the end of March, just two years after it was introduced to the UK market.

A spokesperson for the firm says: "Due to a combination of execution challenges and difficult business conditions, [Macquarie] does not see a long term future for its wrap platform in the UK, or for the Veracity business.

"Macquarie's businesses are built on superior service and execution, which have been important factors in our success elsewhere in the world. Therefore not meeting these expectations within any business is not a satisfactory outcome.

"We will spend the next few months supporting the small number of financial planners and clients who use the platform to facilitate a seamless transfer of investments to other providers."

One of the firms using the Macquarie wrap is Central Wealth Management. Ian Smith, a chartered financial planner with the firm, explained the inconvenience the new development will cause.

He said: "It is very disappointing and, although it was still a bit of a work in process, it was looking very good.

"All our larger clients, who were on James Hay, were transitioning to Macquarie, so now we have got to find another one.

"I don't know who we will turn to. I have just been through the process once this year and I thought the job was done. Now we have got the worry: what if this happens again?"

Smith also expressed concern that while long-term clients would understand the changes, it may affect his standing with newer clients.

He says: "Some of the existing clients where you have a long-standing relationship won't think any worse of us.

"But with somebody you have recently started dealing with, you have just told them the best thing to do is go on this platform and suddenly a week later, we are saying ‘we are very sorry, it's shutting down'.

"You feel it might affect your credibility."

Martin Bamford, managing director of Informed Choice, says his firm looked at the platform and although there were many positives, he found the costs too prohibitive.

He says: "It was a nice platform and very comprehensive. One of the best features was the client user interface, in terms of what they saw with the valuation of their assets

"It also had some very nice linkage to a capital gains tax product which I think some of the other platforms lack.

"But it was very expensive and at the end of the day this is a very competitive market now."

Macquarie confirmed its other retail operations in the UK, including its premium funding, relationship banking, cashflow management and funds management businesses, will be not be affected.

However, it refused to comment on how the closure of the platform will affect its workforce.

Macquarie rolled out its platform in March 2009 and only recently announced new appointments within its wrap team.

The Macquarie Wrap was provided by Macquarie Bank International, a part of the Australian company Macquarie Group.