When and how to switch platforms

This article is part of
Guide to running your business

But not every platform can negotiate.

Mr Okell adds: “So you end up with different share classes for the same fund on different platforms and that might be one of the reasons for an adviser wanting a client to move from platform A to platform B; because they can get their portfolio cheaper there.

Article continues after advert

“But the challenge is there is no compunction on them to move clients between share class A and share class B. But the FCA has said from July there will be. They are mandating that platforms must support conversion between share classes.” 

But Jill Chadburn a chartered financial planner and paraplanner with The Timebank has said in a recent blog that until technology, or the mindset of some platforms change, it is going to continue to be hard to move clients easily.

She says advisers should look at how exposed their clients are to these difficulties.

Meanwhile they should ask the platforms their clients use for three things:

  • If the ceding and receiving platform do not hold the same share class what are the options available, that is, if a conversion is required at some point in the transfer process what is your company doing to help simplify the process?
  • Will the investors be offered the option to convert to discounted units, where these are available for them to invest in?
  • What additional paperwork if any, will the financial adviser/investor need to complete in order re-register holdings with your platform?

As the coronavirus crisis worsens, when it comes to using platforms, advisers will be thinking about business continuity.

Mr Barrett says: “The most important thing for providers to be doing is to communicate their current position clearly to advisers. 

“Obviously this is changing rapidly, so advisers need to know where they can go to self-service and see what is happening. We’ve been doing some work in the last few days to help with this. 

“Our platform directory now has operational readiness information for just over half of adviser platforms, and more are coming on board as we speak.

"This allows advisers to see how providers are reacting to the current crisis, all in one place.”