PlatformsJun 7 2013

Major platforms taking ‘months’ to process re-reg requests

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The four largest platform ‘fund supermarkets’ have defended their re-registration processes, following criticism from within the wider sector that they are “taking months” to complete transfer requests from clients.

FundsNetwork, Cofunds, Skandia and Hargreaves Lansdown admitted that when transferring to a rival which does not have an automated re-registration system in place the process is severely delayed, with FundsNetwork confirming that it can draw out into months.

However, all of the platforms denied that this reflects a deliberate prioritisation of transfers to those with automated systems, stating simply that transferring assets manually is time consuming and that consumer detriment is being caused by a failure from some to implement an automated solution.

In an interview with FTAdviser, Garry McLuckie, head of platforms at Alliance Trust Savings, said that there are ongoing delays in terms of re-registration and in most cases it is taking months to move money out of traditional fund supermarkets and onto Alliance Trust.

Mr McLuckie said the platform does not have an automated solution yet and that this was being blamed by fund supermarkets for the delays. He intimated that the delays were at least in part due to platforms prioritising simpler transfers and that it was taking longer than necessary to move assets through a manual process.

Mr McLuckie said: “It is taking a very very long time to get any money transferred and I would even say it is taking months. Clearly clients get frustrated with people they are moving the business to, but actually it’s the one who is transferring it’s fault.

“There is so much money flowing out that they are choosing to prioritise automated over manual... most platforms work on an automated solutions. Ours will be up and running by early summer, but that comes with the usual IT caveats.”

A spokesperson for FundsNetwork said: “Time efficient re-registration requires all parties in the chain to be fully automated. Without this, re-registration can take weeks and in some cases months, before assets are transferred. We are fully automated; others are not.

“It is disappointing that there are still platforms and providers that do not have automation in place today which, as a result, is causing poor consumer outcomes.

“FundsNetwork is not prioritising automated re-registration over manual, but naturally where automation for all parties exists the receiving platform will see quicker results.”

Stephen Wynne-Jones, head of marketing operations at Cofunds, added that transfers can be processed speedily when they are done electronically via TeX - the automated system brought to market by the Tax Incentivised Savings Association - to a stipulated two-day service.

He said: “Where they cannot be processed by TeX and we have to undertake manual valuations, transactions and transfers, this clearly takes significantly more time, particularly for portfolios of many different funds – as other platforms are finding.

“Our service standards are in line with other platforms, but the lack of TeX adoption is an industry problem which can be solved through other platforms joining us and giving it their full support. Cofunds does not deliberately delay re-registration.”

Danny Cox, head of advice for Bristol-based Hargreaves Lansdown, said: “Naturally an automated, electronic transfer is quicker and easier than a manual transfer but that does not necessarily mean delays are deliberate.

“Certainly some other platforms have had difficulties dealing with the sheer volumes of transfers out and this has led to delays. We don’t have a problem with delays on the small number of clients who transfer away.”

A spokesperson for Skandia said: “We do not prioritise automated re-registration over manual. The fact is that automated re-registration is the better solution for advisers and their clients because it is quicker, however it requires all parties involved to have invested in the required technology.

“Manual re-registration can cause delays at both ends of the process and hence takes longer.”