Novia, a leading UK fund platform, has teamed up with Winterflood Business Services, a provider of dealing, custody, and settlement services, to improve access to exchange-traded funds for independent financial advisers (IFAs). The collaboration aims to boost the adoption of ETFs by IFAs by reducing costs and enhancing the trading experience.
Bill Vasilieff, Chief Executive at Novia Financial.
The lack of efficient access to ETFs on IFA platforms has been a significant impediment to the adoption of ETFs in the retail investor space. The results of a recent survey from Source, one of Europe’s leading providers of ETFs, drew attention to this, highlighting both the pent up demand and desire for improved accessibility from IFAs. The tie-up between Novia and Winterflood will facilitate the provision of a greater range of funds to IFAs as well as streamline the functionality when dealing with ETFs on the platform.
Bill Vasilieff, chief executive at Novia, commented: “What we’re doing with Winterflood is when you’re on the system you can just pick funds and ETFs and box them up and aggregate them and trade direct with Winterflood. It is much more automated and much faster. If you come to us you can pick funds and trade and for us ETFs are exactly the same as unit trusts and Open Ended Investment Companies.”
One of the main challenges stated in providing easier access to ETFs on wrap platforms was the large technology investment needed to accommodate this change. Winterflood plans on rolling out low cost ‘plug and play’ solutions to other platforms in a bid to supply further opportunity for ETF investment across the entire industry.
Alex Kerry, head of Winterflood Business Services, commented: “One of the reasons that a number of advisers don’t use ETFs is that they don’t have access to them. You can educate advisers as much as you want but if they haven’t got the materials or the ability it will not get far. What we’re trying to do here is drive volume into ETF markets by offering a really low cost solution.”
The new venture aims to improve Novia’s position in the wrap platform market by offering a strongly competitive fee structure; IFAs using the new service can expect to pay an initial five basis points charge as well as a two basis points annual charge. Trading costs will be capped between a minimum of £1 and a maximum of £150 for the first six months but may rise to a minimum of £5 depending on future interest expressed in the service.
Novia also provides a range of Copia ETF model portfolios which are also expected to see their trading costs reduce.
The service is scheduled to begin in early December.