How late is too late to call?

Late afternoon on a Monday, Amara made an online request to withdraw her portfolio of managed funds.

On the Tuesday, the fund manager reviewed Amara’s withdrawal application and decided to contact her to confirm the withdrawal. It is a common fraud prevention measure for fund managers to contact the investor before paying a large withdrawal to make sure the investor (not a fraudster) requested it.

Amara was overseas and it was after midnight in the time zone she was in. The fund manager decided to schedule their telephone call for the next day, so they could call her earlier in the day.

On the Wednesday, the fund manager called Amara and she confirmed the withdrawal. The fund manager then decided to defer the withdrawal by one day. This was to minimise the impact Amara’s withdrawal would have on other investors in one of the funds Amara was in because she had a significant investment in that fund.

On the Thursday, the fund manager paid the withdrawal to Amara’s bank account.

Amara complained to the fund manager about how long it took them to pay her. The fund manager reviewed Amara’s complaint and found that they had incorrectly applied the deferral to all of Amara’s investments. It should have only been applied to the redemption of one of her investments. The fund manager calculated that their mistake cost Amara $7,000, which they paid her.

Amara was not satisfied with the fund manager’s response and asked FSCL to investigate her complaint.


Amara said the fund manager did not work within a reasonable time. They could have called her on the Monday (the day she applied for the withdrawal) or the Tuesday (the day the fund manager reviewed the withdrawal application). Amara expected to work around New Zealand business hours while she was overseas.

Amara also did not agree that the fund manager should have deferred her withdrawal.

Amara wanted the fund manager to compensate her for the fall in the value of her investment while she waited for her withdrawal to be redeemed. Amara estimated that her loss was around $60,000.

The fund manager did not agree to Amara’s request for compensation. They understood her frustration with the delayed telephone call, but they considered that they had made a reasonable decision to delay the call.

Further, the fund manager had followed their standard procedures when handling the withdrawal, except for the mistake, which they compensated Amara for.

During our investigation, the fund manager agreed to Amara’s request for interest on the $7,000 they had already paid her.


We concluded that the fund manager was not liable for Amara’s loss between when she submitted her withdrawal request and when the fund manager redeemed the withdrawal.

The fund manager was being prudent in deciding to check with Amara that the withdrawal request was genuine.

The fund manager’s decision to delay the telephone call was reasonable in the circumstances. At the time, the fund manager thought this was the best thing to do, so they could call Amara at a more appropriate time of the day.

The fund manager was entitled to defer withdrawing Amara’s money from one of the funds and they had compensated Amara for the mistake they made with the other funds. In any event, the time they took to pay the withdrawal was reasonable. They did this the day after they called Amara.


We decided that Amara should accept the fund manager’s offer to pay her interest of around $100 to resolve her complaint. Amara accepted our decision.

Insights for consumers

The fall in the value of Amara’s investment after she applied for the withdrawal was caused by market conditions. It is the nature of managed funds that the value of an investment may change between when an investor applies to withdraw their investment and when the fund manager processes the withdrawal.