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Investment platforms

An investment platform refers to two types of utilities used by investors and advisers to manage their investment portfolios: Wraps and fund supermarkets. Both services enable investors to purchase investments online; usually at a discounted rate.

In many cases, the investment instruments purchased can be held on the investment platform in a range of tax-efficient wrappers such as pensions, ISAs or investment bonds.

The platform offers the investor the opportunity to select a range of funds, open-ended investment companies, investment trusts, exchange-traded funds or individual equities to put into the various wrapper accounts.

As such, platforms are better described as services rather than products. They facilitate the management of investment accounts at a reasonable cost.

Fund supermarkets tend to only offer funds and will seek to use size to negotiate preferential rates on these funds from fund managers - what we call super-clean fund charges.

Wraps sell their services on the functionality of the service and usually offer a wider range of investments other than funds. Some full service wraps even offer direct equities from various exchanges around the world along with a full range of discretionary fund manager options.

On 31 December 2012, the investment market place was fundamentally changed by the Retail Distribution Review (RDR). The RDR sought to unbundle the charging structures of platforms. This resulted in the differences between wraps and fund supermarkets becoming blurred.

Fund supermarkets have started to offer some of the expanded investment options and functionality of wraps while trying to use their size to negotiate fund discounts. Wraps, in turn, have reduced pricing to compete while still offering improvements in functionality.

Currently, the UK has over 30 different fund supermarket and wrap providers. The market is expected to consolidate over the coming years.

Contact our wealth team

South Africa

Cape Town

Regent Square
Doncaster Road
Kenilworth 7708 +27 (0) 21 657 2120

Durban

201 The Annex
Ridgeside Office Park
Umhlanga +27 (0) 31 536 8843

United Kingdom

London

Castlewood House
77/91 New Oxford Street
WC1A 1DG +44 (0) 20 7759 7514

Croydon

5-7 Selsdon Road
South Croydon
CR2 6PU +44 (0) 20 7759 7581

Australia

Melbourne

9 Yarra Street
South Yarra
VIC 3141 +613 (0) 8651 4500

Sable International is a trading name of 1st Contact Money Limited (company number 07070528), registered in England and Wales. We are authorised and regulated by the Financial Conduct Authority in the UK (FCA no. 517570), the Financial Services Conduct Authority in South Africa (1st Contact Money [PTY] Ltd - FSP no. 41900) and hold an Australian Financial Services License issued by ASIC to deal in foreign exchange (1st Contact Group - AFS License number 335 126).

Our United Kingdom business, Sable Private Wealth Management Ltd, is authorised and regulated by the Financial Conduct Authority. Our Companies House registration number is 222501. Our authorisation can be checked on the FCA register here: www.fsa.gov.uk/register/home. Our South African business, Sable Private Wealth (Pty) Ltd, is an authorised FSP, regulated by the Financial Services Conduct Authority under licence number 48122.

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