Stocks & Shares ISA Transfer Rules

kalpo1

Hi all
After reading an article on MSE I’ve recently tried to transfer my Stocks & Shares to a cheaper platform. The new platform requested a cash transfer without my consent (as my funds weren’t supported) and my existing platform sold my funds without checking with me. Can they do this? And now both are saying it’s the other’s fault. This seems like rogue practice and an easy way to be defrauded. 

Detail: 
I requested an in specie transfer but it turned out that the new platform didn’t support my the funds I have - but instead of telling me and asking me what I wanted to do the submitted a request for cash. 

To make it worse my current platform didn’t check with me whether this was a genuine request and started selling my funds. I stopped the transfer the same day but I am now left with cash in my stocks ISA. 

I asked my current platform to restore my portfolio given I didn’t check with me and authorise them to sell or transfer. However they are saying they won’t cover the cost of this as they acted in accordance with the instruction and didn’t need to check because there’s an ‘Equisoft agreement’ in place. The new platform are saying they won’t cover the cost because it’s standard practice to request cash if the funds are not supported. I did not see any of this in any of the terms. 

wmb194

kalpo1 said:

Hi all
After reading an article on MSE I’ve recently tried to transfer my Stocks & Shares to a cheaper platform. The new platform requested a cash transfer without my consent (as my funds weren’t supported) and my existing platform sold my funds without checking with me. Can they do this? And now both are saying it’s the other’s fault. This seems like rogue practice and an easy way to be defrauded. 

Detail: 
I requested an in specie transfer but it turned out that the new platform didn’t support my the funds I have - but instead of telling me and asking me what I wanted to do the submitted a request for cash. 

To make it worse my current platform didn’t check with me whether this was a genuine request and started selling my funds. I stopped the transfer the same day but I am now left with cash in my stocks ISA. 

I asked my current platform to restore my portfolio given I didn’t check with me and authorise them to sell or transfer. However they are saying they won’t cover the cost of this as they acted in accordance with the instruction and didn’t need to check because there’s an ‘Equisoft agreement’ in place. The new platform are saying they won’t cover the cost because it’s standard practice to request cash if the funds are not supported. I did not see any of this in any of the terms. 

That's standard and it's up to you to check whether or not the funds are offered. The terms you agree to usually say that if the funds aren't offered they will be sold and the resulting cash transferred. What do the terms state?

dunstonh

The new platform requested a cash transfer without my consent (as my funds weren’t supported) and my existing platform sold my funds without checking with me. Can they do this? 

They had your consent the second you submitted the transfer request.  

I asked my current platform to restore my portfolio given I didn’t check with me and authorise them to sell or transfer.

Transfers are requested via the receiving scheme.   The ceding scheme follows those instructions.    They are not required to check with you again or get additional authorisation on top of the authorisation you have already given.

I did not see any of this in any of the terms. 

You requested a transfer, and the only way this ceding scheme can transfer is by cash transfer.   So, they followed your instructions.     You may have expressed a preference for it to be in-specie, but if they cannot facilitate that, it will default to cash transfer.      

It is your responsibility to ascertain whether in-specie is available or not.

Which provider is the receiving scheme? 

kalpo1

Hi
thanks for the comments. 

dunstonh said:

Which provider is the receiving scheme? 

The receiving scheme is InvestEngine.

I requested an in specie transfer so when it became clear to them that this would not be possible it doesn’t seem unreasonable to expect a communication to advise me that my request cannot be fulfilled and set out options to me. 

I also can’t find anything in the terms that state that a transfer would default to cash in the event the funds aren’t supported. This may be common practice but should it not be explicit?

jimjames

Their website is fairly clear. If you don't hold ETFs then everything would need to go as cash.

If you hold ETFs with your transferring provider that aren’t currently available in our ETF offering, they cannot be transferred. In this case, those securities will be liquidated and transferred as cash.  

https://help.investengine.com/hc/en-gb/articles/8859537951133-Do-you-support-in-specie-transfers

kalpo1

Thanks @jimjames I was looking for that in the terms rather than the FAQs. I should have spotted that. I’ll just have to re-purchase the funds I had - hopefully they’ve gone down! If nothing else this might encourage me to more proactively manage my investment. 

dunstonh

kalpo1 said:

Thanks @jimjames I was looking for that in the terms rather than the FAQs. I should have spotted that. I’ll just have to re-purchase the funds I had - hopefully they’ve gone down! If nothing else this might encourage me to more proactively manage my investment. 

Most things have gone down over the last week and are slightly down over the last month.  So, you may well get lucky.