Cofunds, the UK's largest platform, has backtracked on its unpopular policy on re-reg after an outcry from peers and advisers.
Some of the UK's major platforms were considering writing to the FSA to complain about Cofunds after it opted to force investors to convert existing holdings to clean share classes before they were able to re-register to another platform.
Groups argued the largest fund platform in the country was prohibiting easy re-registration and threatened to report it to the FSA.
Cofunds was refusing to re-register advised clients' assets on to other platforms in bundled form, instead automatically converting fund holdings to clean share classes (without commission).
Its policy was creating delays in re-registration away from Cofunds and onto other platforms, as many rivals do not have a full suite of clean share classes available as yet. It effectively meant Cofunds was retaining client funds.
The only alternative was for advisers to sell their clients' holdings on Cofunds and then re-purchase them on the new platform. Such a transaction not only creates tax problems for clients, but also impacts the value of their holdings as they would have to re-purchase funds at higher prices because of the bid/offer spread.
Cofunds' stance caused an outcry from advisers who commented on the Investment Week and IFAonline websites.
One said: "This is just a retention tactic by Cofunds - if they turn off advisers' trail on re-reg then many advisers will stay put and keep their trail."
However, Cofunds has now altered its policy and is said to be working with other platforms to help facilitate transfers.
Verona Smith, marketing director at Cofunds, said the group was "ahead of the market" on share classes but acknowledged this has caused some admin issues where competitors do not have as broad a range of clean share classes.
"Regrettably, our process of moving to the clean share class for all advised transfers was not in line with the current market position as not all platforms have embraced the new clean share class as we have," she said.
"We understand that our process didn't help our clients move their clients' money with minimal fuss, which is always our goal."
The platform is now allowing re-reg off in the share class the client currently holds OR in the new clean share class.
Re-registration has long been a major issue for the UK's growing platform market, with Tisa launching a campaign and working group to tackle this area back in 2009.
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