SANDLER REVIEW CHALLENGES INDUSTRY’S COST BASE, SAYS WEALTH MANAGEMENT SOFTWARE

The Sandler Review’s support for capped charges on savings products will demand radical action to reduce the industry’s cost base, says leading financial software developer Wealth Management Software.

"The outcome of Sandler will be higher volumes of investment product sales, which must be good for everyone," said Paul Foll, Sales Director of Wealth Management Software. "But the downside for the investment industry will be a more level playing field between investment houses and life companies, plus reduced levels of commissions and fees. This will mean that the lowest common denominator will apply in terms of cost base; I suspect that life companies will have to reduce costs across the board and investment houses will have to reduce fund management expenses. How else will anyone be able to cope with capped charges?"

"The only way to reduce costs is to invest in new technology" he added "and to drive more volume through a fixed cost base. Another element of the strategy is to use as much straight through processing and automated client reporting as possible."

Wealth Management Software’s LISA® wealth management system is used extensively across the financial services industry. Welcoming the Sandler Review, Paul Newton, Chief Executive, said "We have long believed that the personal savings market will grow most rapidly if savers feel that they can trust the investment product providers, understand their offerings and charges, and obtain a wide cross section of products from a single supplier. Savers should also receive consolidated valuations that properly show charges, consistently calculated measures of performance, and which maximise use of tax relief."

Mr Newton added "The only rider that we would add to the Review is that a regular savings process, typically direct debit based, is in the best interest of both consumer and financial services industry, and that every effort should therefore be made to encourage regular saving."

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