RaboDirect has told Irish customers using its investment service that they have until April 24th to sell their funds, after which time they will be transferred to Cantor Fitzgerald for administration.
This is part of the Dutch financial group’s withdrawal from the investment market here, which was announced last year.
As a first step in this wind-up process, Rabo withdrew the functionality for purchasing funds on its secure website on Thursday. It also discontinued its Rabo Regular Investor plan on the same day. This plan had allowed customers to place an order to buy funds at regular intervals.
Customers can still sell their funds until April 24th to “provide sufficient time to reconcile trades”. After this date, any remaining accounts will be transferred to Cantor Fitzgerald on May 5th.
The company has provided a tool on its website to assist customers in determining the potential tax implications of them selling their funds at this point.
Cantor has agreed to maintain the Rabo fee structure for 12 months after the transfer, although it “may decide to make changes thereafter”, according to a letter sent to clients late last week.
Management fee
Rabo charges an annual fund management fee of between 0.45 per cent and 2.1 per cent depending on the fund, and entry and exit fees of 0.75 per cent. No custody charge is applied. The accounts that transfer will operate under Cantor’s “execution-only terms and conditions”.
Rabo has warned impacted customers that there could be a delay in their ability to sell funds following the transfer of their account to Cantor. It is anticipated that Cantor accounts will be set-up by May 15th, at which point customers can recommence their trading in funds.
Rabo had more than 90,000 customers in the Republic at the time of its announcement to end this service. About 6 per cent of these are believed to have active investment accounts, which means about 5,400 customers are affected.
No comment was available from Rabo on how many customer accounts have already been closed.
The company’s decision to discontinue the funds stems from moves to simplify its business model globally.
