Brian Dennehy, the managing director of Dennehy Weller, has criticised the management of Cofunds in an open letter sent to Brett Williams, the chief executive of the funds platform.
In the letter, sent last week, Dennehy warns of “frequent confusion over leadership and direction” from Cofunds, accusing the management of following policies designed to increase the value of the company at flotation rather than servicing the needs of its clients.
As an example, the letter points to last year’s Cofunds summer conference on emerging markets held. It claims the company was selling emerging market funds to advisers, a policy Dennehy calls “bizarre”.
The arrival of Legal & General (L&G) as a major shareholder has also brought into question the independence of the fund platform, according to Dennehy. He calls on Williams to focus on providing a “simple infrastructure” for advisers to lessen the administrative burden of investing, rather than rushing towards a flotation.
Dennehy told Fund Strategy: “The greatest weakness of the adviser fraternity is that it is fragmented and doesn’t speak with one voice. What’s going to be encouraged now is a broader debate.”
Alastair Conway, the marketing and proposition director at Cofunds, says he is “disappointed” with the way in which concerns are addressed in the letter. “I think we are very clear in what we want to be doing,” says Conway. “We want to support financial planning for advisers, and there’s no ambiguity in our minds.”
Conway says Dennehy’s worries are not shared by most of the customers he has spoken to who use the platform, with most supporting the company’s growth plans.
“We got ourselves into profitability last year and we want to do the same this year. That’s what advisers want to see, because if we don’t do that then we’re a charity and not a business,” he says.
Conway strongly rejects the suggestion that L&G presents a challenge to Cofunds’ independence.
“L&G are an important partner, but they are far from having a position where they can dictate what we should do,” he says. “We’re not looking past the fact that we still need to do the basics very well, but it is not our job to tell advisers how to interact with us, just as we don’t need advisers telling us how to run our business.”