Old Mutual Global Investors (OMGI) is to pull out of the offering Individual Savings Accounts (ISA) and investment accounts, and is recommending clients migrate cross to direct-to-investor provider of investment services Hargreaves Lansdown, the company has said.
A spokesperson for OMGI was clear that this was strictly a business decision and was “in no way” related to Old Mutual Wealth’s recent announcement that it was to rebrand as Quilter as reported in International Investment. Details of any fees involved in the arrangement were not disclosed.
No decision has been made in terms of renaming OMGI, said the spokesperson.
The decision to recommend Hargreaves Lansdown meant, said the spokesperson, that clients would enjoy “a seamless migration” with no exit or transfer fees, and was in the clients’ best interests.
OMGI has concluded that its current service in relation to ISAs and investment accounts “no longer meets the expectations of its investors”, said the company in a statement.
“For example, investors now reasonably expect to be able to have online access to their investments, and this is something that is not available via the existing OMGI service,” the company stated.
The portfolio of retail investors is made up of some 3,200 ISA clients, representing £63m in ISA assets under management (AUM) and 5,100 retail clients with £136m AUM in investment schemes.
OMGI has written to investors this week to advise that it has decided to withdraw its administration service for ISAs with effect from 27 February 2018, and intends to carry out a bulk transfer of its ISA customers to Hargreaves Lansdown with effect from 24 February 2018.
With regard to its non-ISA retail clients of investment services, the company states that this cannot be done by bulk transfer but advise that they recommend such a move because it would mean that they can hold all their investments in one place, and “benefit from the enhanced services (such as online access)”.
It said that the company would continue to manage the underlying investment funds held by investors.
OMGI recommends Hargreaves Lansdown
Following a comprehensive due diligence process, OMGI chose Hargreaves Lansdown on the basis that they offer “award-winning, direct-to-consumer service, online account management and dealing, as well as the option to manage investments by telephone and post”.
They added that Hargreaves Lansdown had also committed significant investment into the growth of their platform in recent years. The provider currently manages some £82bn of investments for one million clients.
OMGI chief executive Warren Tonkinson, pictured above, said that investors’ best interests had driven the decision, saying that the compnay had decided that its ISA investors would be best served “by moving their holdings to a direct-to-consumer platform that can provide an up-to-date, online service”.
He paid tribute to Hargreaves Lansdown’s “customer-centric approach and user-friendly technology” and promised a “smooth transfer” of assets.
While Hargreaves Landsown chief executive Chris Hill said that investor digital trends were moving rapidly with mobile access and functionality now an expectation rather than a nice to have. We are pleased to support OMGI’s decision and look forward to welcoming these new clients to the Hargreaves Lansdown investment service.”