One of my clients has a participant requesting to make source specific beneficiary designations. They would like thier pre-tax to go to one beneficiary and Roth to another. They have an advisor who recommended this as a strategy with a charity beneficiary. My Company (i.e. financial institution) does not accept source specific beneficiary designations. Is there legal or regulatory backing for requiring percentages on the whole account? Please advice as to the specific Code or Regulations. Thanks.

It is purely an administrative issue. You do not have to accommodate, but someone else will be willing.