Helm Godfrey is trying to haul £4m off Selestia and threatening legal action if it refuses to re-register its clients’ Isa and Pep holdings off the platform.
The bitter row started after US investment house Dimensional Fund Advisors wanted Selestia to keep its £20m funds on the platform but close them to new money.
Selestia says it only wants funds open to new money on the platform because it does not want to build up legacy pots of assets. Marketing director Bill Vasilieff adds that Selestia built special systems to accommodate DFA’s unique pricing structure.
Helm Godfrey is a keen supporter of Dimensional, with £4m invested in the funds, and managing director Bruce Wilson says it is “outrageous” that Selestia will not offer in specie transfers off the platform for Pep and Isa holdings.
This means that clients will have to cash in holdings, transfer the tax wrapper to another platform and then reinvest. They will not lose their tax allowances but Wilson has criticised Selestia for only giving two months’ notice.
Selestia is offering free switches to other funds and in specie transfers on unwrapped holdings but will automatically encash any holdings, including pension investments, unless instructed otherwise, by the end of July.
Wilson says: “Even though they will not lose their tax status, they will be out of the market, face possible dilution levies and it is an outrage. We are taking legal advice and will be speaking to the FSA.”
Vasilieff says: “Dimensional created this problem, not us. We went out of our way to accommodate them but do not want to build up legacy pots.”
Dimensional head of financial adviser services Sam Adams says: “We wanted to leave our legacy assets there and it is Selestia’s requirement that they move, not ours, but we understand their position.”