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Platforms fear legacy plan will scupper re-registration

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Platforms have warned the FSA’s decision to class re-registration as a non-advised process, therefore allowing legacy commission to continue being paid after the fund switch, could scupper the re-registration process.

In its November consultation paper on the treatment of legacy assets under the RDR, the FSA said it would press ahead with its ban on legacy commission but listed a number of non-advised sales routes, including re-registration, where it could continue.

But Cofunds says re-registering assets which are part legacy-eligible and part “new world” creates a problem because the re-registration standards have no way of recognising which part of an investment is eligible for legacy and which is not.

Cofunds managing director (operational services) Stephen Mohan (pictured) says: “The standard did not envisage different treatments of the same instrument, so the receiving platform cannot tell what to do with any 150bps fund it receives. For businesses expecting to do hundreds of these a day, this is impossible and it can only be detrimental to customers. The simplest but least likely solution is for the FSA to make re-registration a legacy disturbing activity.”

Ascentric managing director Hugo Thorman (pictured) says: “I think the FSA will revisit this stance on legacy commission and change re-registration to an advised process because I do not believe it has understood the implications. Re-registration is something which requires advice.”

Fidelity FundsNetwork head of commercial Ed Dymott says: “For the FSA to say re-registration between platforms is not advised sends out the wrong message to the industry and is in conflict with the work done by the industry and the Tax Incentivised Savings Association on re-registration. We hope that the FSA sees sense and changes this stance.”

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Readers' comments (3)

  • Hugo Thorman said “I think the FSA will revisit this stance on legacy commission and change re-registration to an advised process because I do not believe it has understood the implications. Re-registration is something which requires advice.”

    Absolutely spot on!

    Only the buffoons at the FSA would incapable of spotting this immediately.

    For crying out loud - these people on their ridiculous pay packages, funded by us, are
    regulating us! It really makes you want to weep!

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  • The unintended consequences of yet another fagpacket policy from our 'sincere friends who only wish for clients' best interests.

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  • Playing devil's advocate, where does the position on re-registration leave being "non advised" differ from the non advised transfers of pensions and ISAs by the likes of Hargreaves Landsdown?
    A client could choose to re-register from Cofunds or Acentric to HL I assume and on that basis HL could continue to receive renewals and fund based, why should it be any different with a client who wants to go from HL to Cofunds or Ascentric on a non advised basis and then find an adviser of their choice later?
    As I say, simply playing devil's advocate and trying to highlight anomolies which the FSA with ALL it's resources seems to fail to identify, let alone address before ploughing on with their politically correct, but warped plans.

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