Unable to provide the digital experience investors now demand, fund management firms are closing their savings accounts.
Witan has announced that it will be shutting down its investment trust savings and Isa schemes, representing up to £420 million in assets under management.
At present, Witan has around 16,000 retail investors with either regular savings plans or Isas in its two trusts: Witan and Witan Pacific. These accounts are due to close on May 2019.
Witan Investment Trust (WTAN) is a member of the Moneywise First 50 Funds for beginners.
Witan will offer clients the option to either transfer all accounts over to online broker Hargreaves Lansdown, waiving transfer charges, including exit fees.
Clients can also opt for other regulated savings providers, although transfer fees may apply.
Investors can also request a transfer to the Witan or Witan Pacific share register.
Alternatively, the investors can be sold. Dealing charges will be free of charge, but there may be tax implications, such as capital gains tax.
In recent years, other investment houses have also closed their savings services and transferred their clients and assets to Hargreaves Lansdown. For instance, in 2015 Jupiter moved around 5,000 of its investment trust clients, worth a total of £60 million in assets, to the online broker.
The reasoning behind such moves is that online platforms are able to offer investors and savers a better choice of products and a more user-friendly digital service.
This, Harry Henderson, the chairman of Witan Investment Trust, notes, was the main motivation behind Witan closing its retail savings account. He said: “There is an increasing range of savings platforms offering a broader array of services than those available to Witan savings scheme investors.”
Similar justification was offered by Jupiter during their transfer of clients' accounts to Hargreaves Lansdown. At the time, Richard Pavry, head of investment trusts at Jupiter Asset Management, said: “After careful consideration, we have concluded that our current administration service is no longer able to meet our clients’ expectations.
This article first appeared on our sister site Money Observer.