How well product providers handle the transfer of money out of their business is a useful marker for the overall efficiency of the financial services industry, says Origo.
The Fintech’s quarterly Transfer Index publishes the ‘transfer out’ times of 28 companies in the pensions market. Participation in the Index is voluntary and is published to enable greater transparency within the market and so help drive down transfer times across all pension providers.
Anthony Rafferty, CEO, Origo comments: “While it is natural for businesses to focus on the onboarding of new clients and servicing of existing clients, the efficiency of the industry is perhaps best marked by how businesses respond and serve clients/customers who want to transfer out of the business, for whatever reason.
“The speed of transfers reflects upon the efficiency of the industry to deliver a quality service and the support that clients/customers require when making decisions on their finances, even where that is to transfer out.
“Industry efficiency sits at the heart of what Origo does and is why we established the Origo Transfer Index, along with the 28 participants, the majority of whom saw an improvement in transfers times for the 12 months to the end of Q1 2023.”
The average time to transfer client money out across the group decreased from 14 to 13.7 calendar days.
Rafferty adds: “Where administrative operations remain manual is where we see some of the greatest inefficiencies in the industry. Another example is the letter of authority process. This is where a client has to sign a document for their adviser to be accepted by providers as their authorised adviser, and so able to transfer money out of that provider. The process has developed over the years into a convoluted, still mainly paper-based process which can see clients often waiting months for providers to accept their authorisation.
“Using a digital, automated system for transfer administration of all kinds is now where every provider in the industry needs to be – in particular as we head into the Consumer Duty regime, where the regulator’s focus will be on client/customer support and its effect on outcomes.”
The Fintech has developed a digital solution for providers to improve the efficiency of their Letter of Authority process called Unipass Letter of Authority.
