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FundsNetwork next to offer re-registration

Fidelity&#39s FundsNetwork bec-ame the second fund supermarket to offer re-registration this week, enabling investors to transfer existing investments on to the platform without inc-urring any costs or taxes.

The service, known as an in specie transfer, was first introduced by Cofunds in January. It is expected to be the catalyst for wider use by supermarkets as IFAs can keep tabs on the majority of their clients&#39 investments in one place.

Previously, investors wanting to re-register their funds on a supermarket had to sell and buy back their units, opening themselves up to CGT liabilities and, in the case of unit trusts, losses from bid/ offer spreads.

Like Cofunds, FundsNetwork will start with only a limited number of providers taking part in the service as many groups are unable to participate due to incompatible systems while several other prov-iders have opted out.

Although supermarket cli-ents are more cost-effective for providers, the groups get a smaller cut of the annual management fee. Those that have deliberately opted out fear that big volumes of switches will damage ongoing revenues at a time when fund inflows are weak.

Fidelity marketing director David Cowdell says re-registration will help IFAs to strengthen their relationship with clients at a time when markets continue to disappoint. He says: “We are delighted to be able to launch our new re-registration service in response to strong IFA demand. We hope IFA firms will consider re-registration and leverage the service to deepen the relationships they have with their clients.”

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