24 November 2003
Financial software pioneer Wealth Management Software(WMS) is developing an application of its LISA private client wealth management system to reflect the specific challenges created by the new Child Trust initiative.

WMS sees the application as a logical extension of the LISA system, which currently supports a number of other UK tax ‘wrappers’ such as PEPs, ISAs, stakeholder pensions, SIPPs, and unit linked life products.

In order to provide a competitively priced solution, WMS is proposing to ‘bundle’ all of the above tax ‘wrapping’ software into the Child Trust program free of charge, so that its customers can support their complete private client savings product line on a single administration platform.

It already has a commitment from a UK friendly society to implement the software in the Child Trust context, but is now seeking further implementation partners, with whom the software development cost will be shared.

WMS has identified that the implementation of Child Trusts in the UK presents certain problems for providers. There is an annual £1200 cap on investments, and the likely fees per client are therefore projected to be in the range of £5 to £12 per client per year during the early life of the product. This is slightly mitigated by the projected growth in the fund through new investments over time. WMS feels that the product presents considerable difficulty for IFAs, given their typical cost of sale: the most likely providers of Child Trusts are therefore Friendly Societies and Building Societies, because the cost of marketing the product will have to be kept at a low level.

“We believe the best way ahead is for us to provide our software to in-house departments, and to at least two new third party administrators, in order to create a reasonable range of service options for product providers,” said Paul Foll, WMS’s Sales Director: “We are seeking these customers now, in order to absorb industry views about likely charging structures, and also to enable our customers to launch their products as soon as legislation allows it.”

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development