Platforms will play key role after RDR, says Wins

Platforms will play an important part in whether investment trusts benefit from the retail distribution review (RDR), according to Winterflood Investment Trusts (Wins).

The role of platforms – which accounted for 66% of net retail inflows in 2011 – is likely to grow after the RDR is implemented, says Simon Elliott, the head of research at Wins.

The RDR will remove commission for independent financial advisers (IFAs), increasing the appeal of investment trusts. (article continues below)

Investment trusts are not available on Skandia, Cofunds or FundsNetwork, says Elliott, but developments are expected during 2012.

Elliott predicts that demand for “well managed, high profile” investment trusts with strong track records will increase.

“Our view is that not all investment trust companies will benefit from RDR. Indeed for a large number of funds there is unlikely to be any noticeable change,” says Elliott.

“However, we believe that there are some funds that should attract additional retail interest.”

He adds: “With the IFA community continuing to undergo significant changes in terms of ownership and demand for qualifications, it is safe to assume that investment trusts may not be the number one priority.

“However, unlike other sector commentators, we do see RDR as a sig­nificant opportunity for the industry that could provide additional demand for some of the stronger funds in the sector.”