An adviser has hit out at platform FundsNetwork for refusing to re-register a client's investments to a rival platform because the value of the transfer was less than £40,000.
Last month Highclere Financial Service partner Alan Lakey tried to transfer the Henderson Multi-Manager Active fund and the Jupiter Fund of Investment Trusts from FundsNetwork to Cofunds as part of a "tidying up" exercise for a client.
But because his client had less than £40,000 invested in the funds (£3,100 in the Jupiter fund and £2,700 in the Henderson fund) FundsNetwork said it could not offer an in-specie transfer.
A letter from the platform stated: "FundsNetwork is currently only able to offer platform to platform re-registration where the value of the transfer is in excess of £40,000."
As a result, Lakey had to cash the funds and invest the money back into the two vehicles on the Cofunds platform. Cofunds agreed to waive the initial charges.
Lakey (pictured) said the episode demonstrates the "frustrating" and arduous nature of re-registration.
"There's a lot of poncing around to get something very simple done," he said. "It's frustrating - this is the way the financial services industry treats us when we want to do something the client wants."
He added had Cofunds not waived the initial charges he would have kept his client on FundsNetwork.
Lakey thinks the £40,000 limit was put in place to protect the platform's business.
"If I was to say to FundsNetwork I want to re-register £10k with you they would say yes thanks. But If I want to take it away I can't. It is things like this that irritate advisers and clients."
FundsNetwork said the £40,000 limit, put in place in 2009, was introduced so it can process transfers as quickly as possible.
"There is no industry-wide automated service for in specie re-registration," said a spokesperson. "It's really complex and manual which often results in delays and errors and overall is not a very good customer experience. So we have imposed a minimum amount so we limit the requests we receive in order to process transfers with minimum delay and error."
The platform added it is building a platform to platform re-registration system which will be rolled out in the second half of this year.
The FSA has set a deadline of 31 December 2012 - the retail distribution review (RDR) implementation date - for platforms to offer in specie re-registration.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till