FundsNetwork is offering advisory firms and enhanced switching option that allows them to ‘bulk convert’ selected clients to clean share classes in January 2015.
Applicable to Isas and investment fund accounts, firms can select client assets for ‘bulk conversion’ to clean share classes through an online process on the FundsNetwork website.
An opt in window, open between 8 September and 5 December 2014, is designed to give firms time to identify accounts they wish to convert, provide clients with the necessary disclosure and seek their approval.
This bulk conversion opportunity is entirely optional, giving firms maximum flexibility around the process and they will still be able to use the fund switching service made available in June.
In March, the platform laid out plans for an ‘enhanced switching’ tool for the second quarter of the year, and also announced it would be rolling out a series of “optional conversion opportunities”.
This followed publication in January of the findings of an adviser survey, which claimed support for its stance on bulk conversions to clean fee share classes for intermediary clients, despite a majority saying their platform was not offering enough support.
As previously announced, following on from this opt-in conversion opportunity and prior to the regulatory deadline of April 2016, FundsNetwork will convert any remaining bundled assets held on the platform to clean share classes. It is expected this will not be before December 2015.
All legacy business must be converted to shares that do not include cash rebates by April 2016. At this time any bundled business including cash rebates and adviser trail commission will be switched, effectively switching off trail for swaths of business.
Jon Everill, head of advisory services at FundsNetwork, commented that the launch is in direct response to requests from adviser firms.
“This optional event supports our ongoing commitment to providing maximum flexibility for advisers when dealing with their clients’ bundled assets.
“In conjunction with our new enhanced switching facility and final bulk conversion event currently scheduled for the end of 2015, this new option provides even more choices for advisers to use with their clients in the run up to the April 2016 deadline.
FundsNetwork will distribute a guide for advisory firms detailing the bulk conversion event and the other options available for transition to clean share classes, along with a timeline of events leading up to the Financial Conduct Authority’s deadline of April 2016.
