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Due diligence warning if IFAs re-reg too often

IFAs who re-register client assets too often after the RDR could find their platform due diligence process under FSA scrutiny, according to Calastone.

The fund re-registration firm says the number of IFA platform switches should be reasonably low after an initial period of movement.

Calastone European business development managing director Dan Llewellyn says: “If the regulator sees an IFA changing platform once a year, it could have concerns over due diligence, especially as the costs of switching will fall on the end investor. The volume of re-reg should not be that high as advisers should be looking at a platform as a long-term relationship.”

Pilot Financial Planning director Ian Thomas says: “I would hope that the regulator would welcome advisers re-registering on a fairly regular basis because I think it shows that an adviser is frequently carrying out due diligence procedures.”

In its platform policy statement in August, the FSA decided not to set the “reasonable” time period in which re-registration should take place despite industry feedback which puts maximum registration periods from a few working days to six months. The regulator says it will consider further rules if fund managers or other parties are shown to cause unnecessary delays to the re-reg process or if firms are quick to re-reg assets but mistakes are made in the process.

Fidelity FundsNetwork and Ascentric completed the first platform-to-platform re-registrations in June using the Swift messaging network as part of the Tax Incentivised Savings Association’s re-reg initiative.

In January, Tisa issued an industry agreement for re-reg of assets between platforms, which stated that the process should take no more than 11 days.


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