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Skandia sets out WealthSelect re-reg policy after adviser concerns

Skandia has set out how assets can be re-registered away from its WealthSelect range of discounted funds.

The discounted range of sub-advised funds was unveiled last month. 

Speaking to Money Marketing at the time of the launch, Old Mutual Wealth global head of distribution Steven Levin said the funds would be “on our platform and our platform only”, raising concerns about potential re-reg delays.

Skandia has now clarified its position on transferring out of the WealthSelect range. It says advisers will be able to click a button prior to automatic re-reg which will allow investors to swap from a WealthSelect fund to an equivalent Skandia platform share class, to allow re-reg to take place. 

Tisa has been working to develop an industry standard for re-reg of preferential share classes. The FCA has said transfer of platform assets should happen in a “reasonable timeframe”.

Skandia says clients can use the automatic switch option or encash their investments to transfer out of WealthSelect. Both would incur capital gains tax on unwrapped investments.

Skandia head of platform marketing Mike Barrett says: “If the client is at a level where CGT is an issue and they have unwrapped assets, that is a factor that needs to be taken into account when considering the overall suitability of the proposition.”

Stiddard director Jason Levett says: “Risk-rated portfolios are set up so they can be moved with no CGT liability. This has a less appealing set-up.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. “Risk Rated portfolios are set up so they can be moved with no CGT liability”.

    Net-wrapper portfolios crystallise gains (and are hence liable to CGT) on every switch, every rebalance, every re-allocation – back to the model v OEIC debate…

  2. I’m possibly being obtuse (again). But I really don’t see the point of the Wealth Select Range. What do these funds bring to the party? Why does OM believe if they stick their thumb in the pie the fund will do better than just left to the host fund managers themselves. Why does OM think they can do better than (say) IP, Newton, Black Rock etc.

    So investors are to swap from a Wealth Select fund to an equivalent Skandia platform share class in order to re-reg. Why not just save the hassle in the first place and go native?

    Of course we know WHY OM are doing this. It allows them to take a bigger slice of the cake now that rebates are off the table. Beware – this is not the way forward – ATS is lurking and I for one don’t want to have to answer when the Regulator comes knocking and asks me to justify using a dearer platform. So come on guys – give me some credible ammo for my defence.

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