In Specie Transfers Out

Can anyone from the team or community explain why FT does not currently support in specie transfers out, when it does support in specie transfers in?

Is there a plan or a road map to begin supporting in specie transfers out?

It makes me slightly uneasy about placing further assets on the platform, as I do not want to be locked in or forced to transfer as cash in the event I might wish to, for a range of personal reasons which speak nothing to my customer experience with FT.

I would suspect it ranks as highly as a web-app for many investors as a critical functionality flaw with FT’s current compelling but lean offering.

5 Likes

@Viktor @sampoullain

Would be good to know what the thinking is behind not offering the feature at present.

& Whether is likely to be offered soon.

It does make long-term investors apprehensive about placing further assets on the platform, as it is highly suboptimal to sell to cash before transferring.

1 Like

Surely for ISA accounts they would have to allow in specie transfers? Otherwise the benefit of the wrapper would be lost in a transfer.

@Alan62

At present FT’s policy is to sell to cash, and transfer as cash. This is allowed in ISA transfer rules. But of course not particularly desirable especially if you’re a long-term buy-and-hold investor.

The ability to facilitate in specie transfers out is a distinguishing feature of a mature platform. The big boys all offer it as a matter of course, it’s only really the fly-by-night platforms (T212 looking at you) which do not.

I thought FCA mandates this now which came into effect in Feb 2021

I’ll have a read again now

1 Like

Yuk! I didn’t know that.

Yeah it should have been, so maybe a question for freetrade to answer. It does say the implementation date was still Feb 2021, but it also says they stopped work on consultation of it

Update – November 2020

In Policy Statement 19/29 we announced that we would consult on restricting platform exit fees in Q1 2020. However, this was delayed due to coronavirus, with an intention to consult in Spring 2021; we have now decided to stop work on this consultation in light of the ongoing impact of coronavirus and economic conditions. These changes will allow us to focus our resources on the most urgent work where we can make the most immediate difference to consumers and markets. More information is available in our statement.

The implementation date of the rules to make transfers simpler in PS 19/29 remains 1 February 2021.

The consultation was on platform exit fee from what I gather which is now stopped/paused.

1 Like

Yes to my knowledge it only pertains to this.

It would be good if @Viktor and/or @sampoullain could offer FT’s perspective on this.

Given that FT is not yet profitable and focusing on expansion any potential fine could wipe out the platform. In this scenario, although our assets are ringfenced, due to FCA’s CASS rules, a sale would/could be forced on moving those assets to another provider…?

Alternatively what if I decide to transfer out of FT for reasons unrelated to any service FT provides, I would be disadvantaging myself. Why is FT willing to put all users, plus or otherwise, in that position?

1 Like

My reading of PS19/29 is that it’s entirely about in-specie transfers. However, it seems to me to be restricted in scope to mutual funds (see points 1.14 & 2.6) so wouldn’t be relevant to Freetrade.

1 Like

That shouldn’t be a concern as scaling up which they are doing is very expensive to do. When they expand to new territory for they they are scaling staff etc they will see the income reflect that. :+1: I would also hazard a guess that @Viktor etc are not daft enough to risk blowing all the good hard work in such a way :stuck_out_tongue: :+1:

I agree with all the above. I wud love to bring my big portfolio to FT, but being a long-term investor, I am both concerned and reluctant to do so. I have investments I held for over 20 years. Selling and repurchasing would cost thousands, and have untimely tax implications. Life changes, needs change, one needs plan-Bs and contingencies. Make me pay for it, make it a pro feature I don’t care (I do, but hey better than nothing), but I do need to have the potential hability to transfer out in spice if I wish to.

2 Likes

Has this policy changed recently?

“Upon receiving a valid instruction from another ISA manager we will transfer to another ISA manager within 30 days. To do this, where we are able to, we will transfer your Securities in specie to the new ISA manager. For any Securities held in your Freetrade ISA we are unable to transfer in specie, we will contact you and ask that you sell down these positions and we will then transfer the remaining cash amount to your new ISA manager.”

4 Likes