The Pension Lab is urging advice firms to record the number of letters of authority they deal with, as it embarks on a mission to overhaul the process.
In collaboration with Criterion, Beyond Encryption and Punter Southall, the fintech has launched a new initiative #LogYourLoAPain to build a picture of what they cost the UK financial services industry.
Recent research found that pen-and-ink LoAs, essential in granting permission to advisers to work with clients and receive their policy information, are responsible for frustrating and delaying what should be a straightforward procedure. The Pension Lab warned that it may also cause firms to fall short of their Consumer Duty requirement because the service fails to enable and support customers to support their financial objectives.
Scott Phillips, CEO and founder of The Pension Lab, said: “Encouraging everyone to log the volume of their estimated LoA submissions will shed light on the extent of the issue across the UK, enabling substantive prioritisation for its improvement. In return, advisers will receive a bespoke report, detailing what the current process costs then.
“By showing the scale of the LoA volumes and the cost impact on individual firms and the entire sector, we can make a big step forward to forming a cross-industry coalition to count towards solutions that work.”
Billy Burnside, managing director of Criterion, commented: “The LoA process has been a persistent source of industry frustration for a long time and needs tackling. The #LogYourLoAPain initiative aims to highlight the true cost to advisers and providers of maintaining current practices and enable firms to see the benefits of working collaboratively and identify solutions to improve this lengthy and outdated process.”
The initiative consists of three stages. The first calls all advisers, planners and paraplanners to submit their estimated monthly LoA volumes through an online form, while the second stage aggregates LoA volumes and applies cost modelling. The findings will be shared with key industry organisations.
Finally, the third stage brings together a coalition to foster a competitive yet collaborative approach, including advisers, technology suppliers, providers and administrators to move towards improved solutions.
