Advisers urged to get involved before new platform rules come in

Advisers urged to get involved before new platform rules come in

Advisers need to share their experiences of carrying out in-specie transfers to make the process better for all parties involved, the director of Altus' software department has said.

Ben Cocks said he understood why some advisers are concerned about platforms' ability to carry out efficient, cost-effective transfers.

However, he said it was also important that advisers considered taking part in various industry working groups, such as the UK FMPG and TeX, in order to improve the overall client experience. 

A Financial Conduct Authority rule change on asset transfers on platforms is due to take effect from July.

As set out in the FCA's December 2019 Policy Statement: Making transfers simpler, the rule change aims to make it easier, less costly and more transparent to transfer assets from one platform to another. 

The paper stated that platforms should offer consumers the choice to transfer units in investment funds that are common to both platforms via an in-specie transfer; request a conversion of unit classes, where this is necessary to enable an in-specie transfer to take place; and ensure consumers moving onto a new platform are given an option to convert to discounted units, where these are available for them to invest in.

But Mr Cocks said: "Some platforms aren’t pulling their weight, some transfers still take too long, and we all have a lot of work still to do to meet the FCA deadline in July.

"But we should recognise that much work has been done and many platforms provide a great service. We recently reported on an in-specie Isa transfer processed in less than a day by Fidelity, Hargreaves and Vanguard.

"We might make even better progress if more advisers participated in these industry working groups (most notably TeX and UKFMPG)."

He added: "Advisers' experience at the sharp end could help shape solutions to better serve customers and it would help advisers understand how best to exploit the services that exist.

"Otherwise we might be in danger of customers being advised to take unnecessary risks selling assets when an in-specie transfer would have been quicker and simpler.”

His comments came after advisers reported ongoing issues with platform technology ahead of the rule change.

Last week, Jill Chadburn, chartered financial planner and paraplanner with The Timebank, said: "The reality is that until technology, or even the mindset of some platforms, changes, it is going to continue to be hard to move clients easily.

"Until such time, you should at the very least look at how exposed your clients (and subsequently you for giving the advice to use the platform in the first place) are to these difficulties."

But according to Mr Cocks, such difficulties will be the exception, rather than the norm, come July. 

He said: "The industry has put a huge amount of work over the past few years into improving in-specie transfers and conversions. There have been 100s of hours of debate and 1000s of hours of work on defining legal agreements, processes and technical standards.