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Reregister now or lose out, warns Cofunds

Cofunds is warning that IFAs should act quickly to reregister clients on the platform or risk losing out to more technologically advanced competitors.

It follows the recent launch of reregistration services by FundsNetwork and Cofunds which allow IFAs to easily transfer clients&#39 existing assets on to the platforms.

IFAs using the service automatically take any trail commission which may have previously been payable to another adviser. IFAs will also gain trail commission on products which their clients bought direct.

Cofunds also warns that reregistration could present a conflict of interests on platforms which have both IFA and direct offerings by tempting IFA clients to cut out their intermediary.

Chief executive Clive Boothman says: “The introduction of the cost-free reregistration process encourages transfers purely to consolidate assets. While no barriers to consolidation is good news for the IFA, the bad news is this could equally make IFAs&#39 existing business vulnerable. It is a first mover advantage situation. Consolidate before the competition or even before the client does it for you.

“Supermarket platforms which offer their services both to IFAs and direct to investors appear to be two-timing the IFA with reregistration. They are giving the clients the opportunity to consolidate their own investments directly, cutting out the IFA.”

Fidelity marketing director David Cowdell argues there is no conflict of interests. He says: “An IFA client can reregister himself on FundsNetwork but the link is not broken with his IFA. He can elect who his broker is and make that clear to us. The assets do not become part of FundsNetwork&#39s direct business.”

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