Transferring between investment platforms may finally be getting easier.
The Financial Conduct Authority (FCA) has today published a Consultation Paper (CP19/12) proposing to make transferring accounts between investment platforms both simpler and cheaper.
The proposals, if implemented, will be great news for investors. At present it’s all too common for platforms to charge fees when transferring out to another platform. And in some instances, it’s not possible to transfer investments ‘as is’ (called ‘in-specie’).
Having just read the paper, I can’t help but feel that it’s squarely targeted at Hargreaves Lansdown: i.e. large platforms which have potentially high exit fess and special fund versions that can prove difficult to transfer in-specie.
The FCA’s two key proposals are banning all platform exit costs associated with transfers out (which would include in-specie, dealing and account closure fees) and requiring platforms to convert special fund versions to standard ones that can be accepted by other platforms.
I really hope the FCA has the teeth to implement its proposals in full, as it will give investors a fairer deal by removing potential barriers to transferring. Unfortunately, its track record is not great, a previous fund consultation that had the potential to really shake up investment fund charging has made little difference so far.
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