OpinionApr 3 2013

Platforms need to buck up their ideas on fund re-reg

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
comment-speech

If the Financial Conduct Authority or the Treasury would like an easy win in their objectives to achieve better financial outcomes for consumers, they could do a lot worse than grab key players in the fund and platform industry and bang their heads together.

It is unacceptable for investors to have to wait more than a few days to see their holdings transferred from one platform to another, or from one owner to another. The technology exists, but the will clearly does not.

Even those ‘bad boys’, the retail banks, have managed to cut down the time it takes for money to transfer from one account to another, and from one bank to another. I can make an electronic transfer from my bank account and see it arrive in someone else’s bank account moments later. In this digital world of platforms and paperless holdings, surely it cannot be beyond the scope of the industry to sort this?

The problem seems to be that there is still too much human intervention needed. On top of that there are too many rules that need navigating. A recent transfer we were trying to effect highlights some of the problems. One of our clients has a holding with Invesco Perpetual while everything else is held on a platform. It has significant capital gains and we proposed transferring it on to the platform so that we could manage the CGT disposals in different tax years, and through transferring some into the spouse’s name.

If the FCA wants to see better consumer outcomes and a better stance on use of platforms, it needs to force providers to make changes

In theory this sounds simple, but in practice it has become a nightmare. For starters, we were told that it could take several weeks to fully re-register the fund from Invesco Perpetual on to our platform – a ridiculous time scale. In this day and age things such as re-registration should not take several weeks. We persevered. However two weeks later we were contacted because Invesco Perpetual would not make the transfer until it had completed money laundering checks. The fund had been in our client’s sole name and we were transferring it into a platform account that was in joint names. It took two weeks for it to raise it as an issue. Clearly the industry has got a long way to go.

If the FSA/FCA wants to see better consumer outcomes and a better stance on use of platforms, it needs to force providers to make changes. From my perspective, having selected my platform of choice I am damned if I want to change to another. Hell will freeze over before I voluntarily attempt to transfer client assets from one platform to another en masse. I did this once and it was worse than moving house. Truly a gruesome experience.

Dennis Hall is managing director of Yellowtail Financial Planning