HELP NEEDED - Can't sell investments as broker is changing Custodian

Thrugelmir

If the assets are managed by a third party and they've withdrawn their services, resulting in a requirement to transfer to a new provider. Then there's little that can be done. The transfer should be effected fairly quickly. Though not instanteously.  This will be undertaken under the guidance of the FCA.  

tacpot12

I've project-managed a change of Nominee for a large bank, and the actual change-over took a maximum of three working days (same as the settlement time) for UK-domiciled shares. For overseas-domiciled shares, the process was going to take upto five working days. 

A change of nominee should not be necessary unless the previous nominee has failed or has lost their registration with the FCA, in which case I would expect more than just customers of your broker to be affected. If the change of nominee is a discretionary change initiated by your broker, they should be able to tell you when the transfer will be completed. The nominee that the shares are leaving doesn't have a choice (unless their systems have failed), and  there nominee receiving the shares doesn't have a choice about accepting the trades assuming they have a contract to provide nominee services (and the trades are of shares that are not sanctioned). If your broker is trying to move any Russian shares between nominees expect this to take an near infinite amount of time as no UK nominess is going to allow any Russian shares to be registered until the sanctions are lifted.

Ask your broker why the change is taking place, and make a formal complaint if the situation seems to be within their control. Take the complaint to the financial ombudsman after 8 weeks. 

This link might give you some ideas about whether the Financial Ombudsman might side with you, and whether compensation is possible: Stocks and shares (financial-ombudsman.org.uk)

Marcon

davethebb said:

I am currently waiting for them to formally respond to my complaint so I don't want to rock the boat at the moment. 

I think you're over-estimating how likely they are to read this forum - and they are highly unlikely to associate you with your complaint even if 'someone' does.

davethebb said:

 I am also talking to the ombudsman who has been very helpful and guided me through the complaint with them - I think they are taking a keen interest. They have said that if I am not satisfied with the response then they will immediately investigate but it may take a while??

'Immediately' and 'it may take a while' are mutually exclusive. 

davethebb

Tacpot, The three-day time scale is exactly the response they gave me. However, when the three days came they had only sold one fund (out of 20 or so) and promised the remaining funds would be available over the next couple of days. over a matter of 7 weeks, the funds became available to sell literally one by one and it seems they had no control over what fund was available and when. 

In the informal response to my complaint made a while ago, they have effectively said the delays were out of their control and therefore they are not responsible. The FOS, requested that this response be formalized and they will then take it up.

davethebb

There is a lot at stake money wise so I do not want to run the risk of someone perhaps on this forum running to the company concerned to say it is being discussed etc. Perhaps when the FOS have investigated I can then openly name the company as I believe (please correct me if I am wrong) they publish their findings.

Thrugelmir

So it's an ongoing issue where you've already exhausted internal complaint proceedures. Not one you've just faced. Drip feeding information doesn't help us...........

eskbanker

davethebb said:

There is a lot at stake money wise so I do not want to run the risk of someone perhaps on this forum running to the company concerned to say it is being discussed etc. Perhaps when the FOS have investigated I can then openly name the company as I believe (please correct me if I am wrong) they publish their findings.

The standard FOS process involves an adjudicator making resolution proposals to the complainant and the institution, and generally that's as far as it goes, assuming both are happy to accept the findings.  However, if either doesn't, there is the option of escalating to an actual ombudsman for a binding decision, and it's only these that are published.

In terms of naming the company, you do realise that it's not difficult to find in your posting history, unless you've switched everything since last year?

masonic

eskbanker said:

In terms of naming the company, you do realise that it's not difficult to find in your posting history, unless you've switched everything since last year?

If it's that company, then I'm surprised this is the only instance of someone being impacted. Also, the custodian in that case is part of the same group of companies, so there isn't an opportunity to blame someone else.

Getting this far in a thread with so few material facts is never a good sign. It means we have to piece things together for ourselves.

One piece of information that we do have is that the OP has been told they cannot transact because there is an ongoing change of custodian. This is not an issue that would affect just one customer. If it affects one it will affect all. We also know that the FOS has been contacted and intervened in the issue, meaning it is not just something that happened for a brief period on Friday. Trading has been suspended for days or weeks. A mainstream online investment platform isn't just going to silently take its services offline and expect nobody to notice. Even hours of downtime will generate headlines in the financial press.

It would be premature to raise hand to chin just yet, but something isn't adding up here.

davethebb said:

Tacpot, The three-day time scale is exactly the response they gave me. However, when the three days came they had only sold one fund (out of 20 or so) and promised the remaining funds would be available over the next couple of days. over a matter of 7 weeks, the funds became available to sell literally one by one and it seems they had no control over what fund was available and when. 

In the informal response to my complaint made a while ago, they have effectively said the delays were out of their control and therefore they are not responsible. The FOS, requested that this response be formalized and they will then take it up.

When did these events happen? Did you happen to be in the process of an in specie transfer from another investment platform at the time you wished to sell your holdings? Such a transfer does involve re-registration of holdings between nominees and can take a few months to complete. Or were you investing through one of the smaller brokers absorbed into the big one that shall not be named?

It appears you are saying the investments have now all been sold (over a 7 week period). All seems to be in the past tense now, yet yesterday it very much seemed an ongoing issue with no indication of when holdings would be sold. Could you confirm that this is a past issue where you're in an advanced stage in the complaints process?

davethebb

All, sorry for the confusion on this I was trying to simplify the issue(s). The incident happened a while ago during COVID. It was the result of very bad service both in the advice and responses from the company concerned (separate complaint raised, and then proceeded through to the FOS). Due to the bad service etc. I decided to move my business to Interactive Investor and manage it myself.

Just prior to the move I had asked the question of my discretionary manager at the time about the best way to move the funds over (I was informed after he checked some could be done in Specie but a lot couldn't). - The discretionary manager advised me to cash in and do a cash transfer and the funds would be available in my SIPP account provider, Xafinity in 4 or the latest 5 days. Xafinity would then transfer the funds via ORIGO to new SIPP account with Interactive Investor. The following day I initiated the sale, then to be told two days later by email that they could not sell my funds until the middle of the following week because they were changing their custodian. 

The next week came and went with a few funds sold and promises of them being completed in the following days. This  continued for 7 weeks or so (it may be longer) . Various cash transfers had to be undertaken so that I was not out of the market for too long, but these transfers did not go smoothly, errors were made causing more delays (Note; There was a lot of confusion but it seems that II may have made some basic errors on the ORIGO system by using an incorrect SIPP provider e.g. not Xafinity (whom I have to say help enormously and was at no time to blame for the problems). I considered and discussed with the DM temporarily reinvesting in a general fund but the problem was they could not tell me what funds were available to use and they could not anyway as I was not a client even though I had been with them for more than 25 years.

I have raised a second formal complaint regarding the actual transfer delays in addition to the bad service complaint, and they have responded to say the problem was not of their making and therefore they are not to blame. This has been raised to the FOS but there is some back a forth with the company becuase it appears they have backtracked and said that they have not issued a final response, hence the delay in the FOS becoming formally involved. We are expecting a formal response from them very soon but they are really dragging their heels. The FOS has said that they are very slow in responding but the FOS are slow as the investigator only works part time.

The FOS has informed me that it may be that if they did not initiate the change of custodian then they may not be to blame and I will need to seek recompense elsewhere but they have not clarified this yet. 

The FOS recommended after seeing some of the documentation that I raise a complaint with Interactive Investor due to the errors made with the ORIGO system. I have done this and they have formally responded, but the matter is also in the hands of the FOS at their request becuase they see that it is directly liked to the transfer complaint.

This is the full story, Sorry for the confusion.  

A couple of questions that I have are;

1) If the investment company concerned did not initiate the change of custodian who would and who would I seek recompense from?
2) Would the investment company have know that the change of custodian was going to happen within the following week e.g. should the descretionary manager have known and advised me accordingly?

Thrugelmir

The fact that you have said "during Covid" means that it's no great surprise that service levels weren't great. During normal times there's little spare capacity to deal with unexpected events. The pandemic would have made many operations totally dysfunctional. Little that can be added now to the conversation. Using hindsight is easy to criticise others. The problem is there'll be no log of events for an individual case. The missing staff, the work backlog, the time it took to set up homeworking etc etc.