Baffled By How In Specie Transfers Aren't Required By Law

In the UK, the current account switching service makes it really simple to switch current accounts in order to force banks to compete with each other and ensure customers aren’t put off from attaining a better service due to excessive administration. Nobody is locked in to a specific institution due to anti-competitive practices.

With that in mind, it truly baffles me how in-specie transfers aren’t treated in the same way as current accounts. It seems to me to be totally unjustifiable for a company to not allow customers to leave (or join for that matter) without first being forced in to performing a potentially disadvantageous financial decision in the form of closing stock positions, due to transfers being cash-only. It’s like a bank requiring you to empty your current account before you switch away from them. Why? Many would find it unnecessary and inconvenient at the least. I’ve heard the argument about brokers needing to identify share ownership etc etc but this is something that can easily be standardised across the industry if there was the political will.

Nobody loses in this scenario if in-specie transfers are allowed both in and out so with this in mind, I’d like to add my name to the already long list of people on this forum who have asked for in-specie transfers to be offered by T212. This surely must be one of the most important feature requests for customer choice, safety of investments and market competition.

My questions for the T212 team are; why do you currently allow cash transfers but not in-specie transfers? When can we expect to see in-specie transfers? I’ve seen many representatives on this forum say they might come one day but we don’t even get so much as a vague timeframe.

I honestly don’t see how improvements to trivial things such as the pies feature can be mentioned in the same breath as improvements to the transfers functionality.
Thoughts?

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Agree with you. It needs to become mandatory for brokers in my opinion.

It’s an issue across the industry.

Edit:

Deadlines and complaints

ISA transfers should take no longer than:

  • 15 working days for transfers between cash ISAs
  • 30 calendar days for other types of transfer

^ We need that changed first. Not sure if there is a ‘petition’ for it already, plus to add it should be a mandatory service for all brokers. If not we could work to write one? It would then correct the industry as a whole.

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there isn’t the political will because they have ‘more important’ (political sparring or some other nonsense :man_shrugging:) issues to deal with and people won’t agree on a decision, they have tried before. it affects such a small portion of people they don’t see the need for urgency. we may say it should be mandatory, but its the financial institutions doing the work, not the politicians.

there are brokers who offer in-specie sure, but at a charge and have you seen how long it takes to complete? in that timeframe you are locked away unable to do anything. I would rather sell on my own terms, move the funds to my new account and be back in action the next week.

It will be good to get it eventually, but I don’t have the view that T212 specifically should neglect other aspects of their service for the handful of people that want to hop about. to push the ball, we would need to rally people over social media, mainstream news et cetera.


your comparison is bad IMO, the whole reason current accounts are so easy to switch is because they are only handling money, or rather a digital-log of your money. it is so integral to daily life for all levels of society that banks cannot get away without offering the service and its heavily automated. share ownership is not currency, it has a lot of technical requirements they currently have to do manually, while banks have long been automated for cash.
T212 will offer it once they can automate it, but the lack of timeframe is because they are not working on it currently. the instant you announce a timeframe you have to allocate resources to the task. resources they don’t seem to have.

moving shares are more like moving house than changing your bank account IMO.

if the decision to move your account stacks up as a ‘potentially disadvantageous financial decision’ perhaps the decision to move needs to be re-examined. because if the positive is to stay, then the reason for leaving is either not good enough or hasn’t been judged properly. said another way, if the reason you are leaving, isn’t more important than the financial impact of doing so, you don’t have your priorities straight

I don’t see how in-specie transfers would benefit me more than improvements to the brokers service offerings will. because I have no use for the feature.

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I’ve had a quick hunt and not found any petitions out there yet.

On second thoughts, perhaps it’s something better to raise in general with the FCA rather than government given they monitor and help promote competition, and find out how best to take forward. I’m sure the interest is out there.

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Here’s something you may find interesting:

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.fca.org.uk/publication/policy/ps19-29.pdf&ved=2ahUKEwjWqMbOyaPzAhVlnFwKHb2lBIgQFnoECAgQAQ&usg=AOvVaw3FzJa_cIAJkd1Ojq1QYG-e

As far as I’m aware rules got shelved due to COVID.

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Yeah that is specific to open ended funds reading the material, but does highlight the technical difficulties well. Might be worth reaching out to them for an update on a new ‘date’.

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I think those rules are now implemented, since February 2021. But they only concern an issue of transfer of units in different fund classes between platforms that do already offer in specie transfer.

Fortunately, for the UK investor a sale of shares followed by their repurchase on another platform can be done without triggering a big capital gains tax bill, due to the share matching rules of HMRC. The only cost is the bid/offer spread and any fx cost and commission on the repurchase. Investors who are tax resident elsewhere are not so lucky and may be forced to realise capital gains that they would rather not.

This means a transfer out by a UK tax resident of a US shareholding from Trading 212 to another UK platform might cost 0.1% bid/offer spread, plus 0.15% Trading 212 USD to GBP fx fee, plus repurchase commission, plus 0%-1.5% new platform GBP to USD fx fee, depending on fx fees of new platform.

I like the analogy that it is more like moving house than moving bank accounts. It is something the FCA or CMA should be addressing.

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If you haven’t already, consider voting for the in-specie stock transfer feature over on this poll: Most Wanted Features Poll 2022

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its just an opinion poll, it doesn’t influence anything T212 may or may not introduce.

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It is the only thing we have though?

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The poll is a market research (free) and should influence features T212 introduce in other to stay ahead of competition.

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it’s a community poll, not market research, there is no objective process behind this just a question and a range of options. its good to see a very select group of peoples opinions but it’s biased and not wide enough to represent anything. market research collects far more metrics so that the data can be made sense of, that’s not happening here.

it’s a fun thing for us to see what others think, but it remains a fact that this is a community forum and T212 are not obligated to act on anything we say here. sure, people can tell us what 5 listed features they would like, but not how important it is nor what compromises they would accept to be able to use that feature.

this isn’t the first and it won’t be the last, T212 were not compelled to act on the previous polls nor must they on this or future ones. If they run an official survey amongst clients that is another matter entirely which I would actively welcome. if tony were to post a 3 choice poll and you got 1 choice for what feature they would prioritise for the next quarter, that would be something that influences T212’s decisions.

what kind of research can you do when you collate votes from those who only show up to request a feature? the results can easily be skewed by doing what Birk did, going to various topics related to ‘in-specie’ just to tell people to vote for it, even if the topic was more than a year old. that’s not a community member, that’s a guest stopping by to ask for a favour.

this is a place for the community to interact, if you just want to tell Trading212 something use the support chat and open a ticket.

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Technically an unfair competition as one particular selection has had one user try to drum up support on numerous dead threads tagging posters that had commented previously. This runs the risk of being of one user getting the feature they want rather than the community getting the feature they want.

And before you say it, it’s an unofficial poll and we/I don’t have the desire to do it / push a different narrative.

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@Dao and @Scrooge_McCodf As long we have the forum where people interact freely openly and privately, I don’t think even T212 themselves can attain the “objective process” and unbiased customer feedback outcome.

Obviously if T212 decides to conduct the survey themselves, they would reach all customer base, more credibility, obtain more structured detailed information inclusive of level of importance & compromises being mentioned etc.

However, they haven’t and nobody knows if/when it would happen, hence what we’ve got currently is the best that is available if even if it’s not perfect and as such my view it should influence the features being introduced by T212.

Agreed T212 is not obligated to act on these unofficial polls but as investors we know countless of companies that have fallen by the wayside – they had the best intensions, just didn’t know what their customers wanted.

Now It may or may not appear that In Specie Transfers is being pushed as I can’t speak for others, however the actual meaning of the term In Specie Transfers is not easily obviously to everyone– I personally had to google it long ago when it first came up on the forum.

So maybe the intended purpose was to enlighten as against pushing – just the approach being utilized

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