Skandia is planning to dump re-registration as a means of asset gathering on its fund supermarket because the process is too expensive.
Regarded by the group as a loss leader, re-registration has been a key battleground for fund supermarkets in the fight for assets.
Cofunds has taken approaching £1bn through re-registration while FundsNetwork has taken more than £500m.
Cofunds says that last year re-registrations comprised 75 per cent of inflows while 45 per cent of FundNetwork's inflows in 2004 so far came through re-registration, many incentivised by cash inducements to IFAs and their clients to re-register assets onto its platform.
Skandia offers free re-registration of Peps and unwrapped fund business onto its platform but can only accept Isas as a cash transfer.
Investment marketing manager Ian Thomas says re-registration business is fundamentally unprofitable, being labour-intensive with no savings from scale and could destabilise a platform's finances.
Skandia will continue to offer re-registration for IFAs taking unwrapped business off the supermarket to avoid them incurring CGT liabilities.
Cofunds and FundsNetwork have been criticised for restricting IFAs' choice by forcing them to encash their clients' holdings if they want to switch fund supermarkets.
Both offer free registration of client assets onto their platforms but make IFAs encash assets to switch platforms, potentially resulting in clients incurring a CGT hit and taking them out of the market.
Selestia offers re-registration off its platform at cost price, as does HL Vantage.
Thomas says: “Offering re-registration as a loss leader is risky because it is such low-margin business. It can have a 10-year payback period and potentially destabilise a platform's finances.”