There are also reports that the platforms are already struggling to cope with issues such as re-registration. This is distracting attention from other areas of potential development.
This would seem to be bad news for investment trusts. However, the problem may not be as acute as it initially appears. Firstly, while the three major fund supermarkets control roughly 70 per cent of the platform flows into open-ended funds, it is not clear that the type of adviser using those platforms would be a natural investment trust buyer.
Mr White says that they have seen the strongest flows through the discretionary market and via direct-to-consumer platforms: “There are a reduced number of IFAs, and those that remain are increasingly constructing model portfolios or outsourcing. The traditional IFA is, in many cases, separating the investment advisory and financial planning components. The regional brokers, such as the Brewin Dolphins, are picking up those investment assets.”
These brokers, he says, are far better geared to using investment trusts and the BlackRock business continues to see strong flows from their platforms.
The large fund supermarkets may have put investment trust access on the back-burner, but it is not necessarily a significant problem for the industry. Those advisers who use investment trusts source them through alternative platforms, other advisers are outsourcing to brokerage groups and the direct to consumer platform markets all offer investment trusts. The case for fund supermarkets offering investment trusts is not clear-cut.
Cherry Reynard is a freelance journalist
PLATFORMS
THE BIG THREE AND INVESTMENT TRUSTS
Fidelity FundsNetwork
Originally announcing plans to add investment trusts to its capability in 2012, last year it announced the initiative had been put on hold as it prioritises projects with greater adviser demand
Cofunds
In November 2013, the platform announced it was abandoning a pilot scheme started in 2012 with Barclays Stockbrokers to list investment trusts alongside other listed securities. It had originally been launched with 10 adviser firms, but Cofunds stated it would not be proceeding with a full service.
Skandia
The platform says demand for investment trusts from advisers remains low, and therefore it has no plans to offer the asset class on its platform for the time being.
