FCA: Clients must be forewarned of bulk moves to 'clean' funds

It is "essential" clients are given prior notification when their fund holdings are converted to post-RDR 'clean' alternatives, but individual consent is not necessary, the Financial Conduct Authority (FCA) has outlined in finalised guidance on bulk transfers to clean unit classes.

Among the feedback the FCA received to its initial guidance consultation in February was the difficulty of assessing whether bulk conversion would be in the best interests of individual clients. The FCA said respondents made the point that, as well as the reduced AMC, firms needed to take into account new platform charges and charges other than the AMC, which may make the conversion more expensive. Some respondents also suggested it would not be necessary to inform clients when the move saves them money. However, in light of the feedback, and to mitigate the risk that some clients ...