Cofunds adds banks to its black book

IFDS investment injection means the UK fund supermarket can widen its base to include banks as well as IFAs.

UK fund supermarket Cofunds is chasing business from banks for the first time, now that the British wealth advisory market is set for depolarisation. The London-based operation recently received a boost when record-keeping specialists IFDS, owned by State Street and DST, bought a 30 per cent stake in the business. Charlie Eppinger, chief executive of IFDS and new chairman of Cofunds, revealed that thanks to this investment, the fund supermarket now has the ability to extend its offering to banks. He believes the time is right for such an initiative, as the abolition of polarisation in the UK market – between independent financial advisers (IFAs) and advisers tied to a particular fund company, and therefore restricted to selling in-house products – will lead to banks selling multiple, third party funds. IFDS is providing Cofunds, whose main competitor is Fidelity’s FundsNetwork, with financial backing and technological support. Until now Cofunds has dealt almost exclusively with IFAs, with 4000 IFA clients and over Ł1bn (E895m) in assets under administration. The platform offers over 680 funds from 50 fund groups. The idea is that IFAs can access these products through a single point rather than through the administrative headache of meeting numerous fund groups one-to-one. Now, Cofunds is hoping to sell this service to UK banks. Mr Eppinger claims that using Cofunds will result in:

• Reduction of cost
• Better cash flow management
• Better service to the end client
• More revenue from consolidation
• Ability to serve multiple needs of customer through single account. The last capability is designed to assist banks in offering wrap fee accounts to their clients. Founding fund managers Gartmore, M&G, Jupiter and Threadneedle also continue to hold stakes in Cofunds.

Eppinger: third party funds boom