A number of platforms are reporting difficulties with the re-registration of assets from Cofunds as the platform is treating the transfer as an advised event and automatically stopping trail.
This poses a problem for platforms who do not have the relevant clean share classes available. Cofunds says it will work with other platforms in such situations to allow a share class conversion, usually within two weeks.
Money Marketing research shows many platforms have restricted the number of clean share classes available or are not offering any clean share classes.
Money Marketing understands other platforms are considering alerting the FSA to the problem because it is hindering the re-registration process. It became mandatory to allow re-registration from 31 December.
Standard Life currently does not have any clean share classes available. It says many of its customers are better off in bundled share classes because of rebate deals it has negotiated with fund managers.
Head of investment group relations Graham Dow says: “We are in discussions with Cofunds to resolve the re-registration issue. Whilst we appreciate the industry as a whole will begin to transition to unbundled share classes we need to ensure that the transition is in the best interests of our customers.”
Cofunds head of proposition Verona Smith says: “We made the decision to introduce new clean share classes because our interpretation of the rules is that re-reg is a disturbance.
“Where a platform does not support clean share classes we will work with them to ensure the client is not disadvantaged and that the share class conversions happen within an acceptable timeframe, usually within two weeks.”
In its February 2012 policy 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 routines, including re-registration, where it could continue. Cofunds said the move creates problems because the re-registration standards have no way of recognising which part on an investment is eligible for legacy and which is not.
Independent platform consultant Stan Kirk says: “I cannot see why Cofunds is doing this other than to delay the re-registration process.”