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A simple answer to improving pension transfer and re-reg times

Good management information (MI) is key to improving the transfer experience for adviser firms and end consumers, says Origo’s Paul Pettitt

Proposals in the ‘Improving Pension and Investment Transfers and Re-registration’ consultation paper to collect and publish management information on investment re-registration and pension transfer times, is essential for driving the industry forward.

Origo was tasked with building the Options Transfers service in order to bring down pension transfer times from an average of 50 days at that time – and now average transfer time for providers is eight calendar days through the service. To help achieve that, we collected MI every month and we aggregated it every quarter and published that data quarterly through the trade press, so that advisers could see how transfer times were coming down and which companies were at the forefront of putting customers at the centre of their processes.

In effect we created visibility for those improving customer service, which was very well received by advisers, some of whom started to put their business flows to those organisations that were delivering better service.

So as a lever to make things happen, Options has proven that in the pensions world publishing MI works. Importantly, comparative MI can help organisations to argue the business case internally and get the investment needed to improve their administrative processes.

Be careful what you measure

Equally critical is what is measured. Here, we have to look at transfers from the consumer’s perspective. What would a consumer see as a reasonable time frame for a transfer to go through?

There is a proposal as part of the industry consultation paper, for a 48-hour stop-the-clock Service Level Agreement (SLA). This would enable every provider taking part in a transfer to measure their little bit of activity and then stop the clock when the application was being progressed somewhere else – for example with the adviser, or with the client, or multiple ceding parties – until the whole process was complete. We see that as more process and inward industry focussed than in tune with what consumers need.

From Origo’s experience, what is needed, and what will drive a reduction in transfer times, is a focus on a SLA that measures end-to-end elapsed time. That is a timescale viewed from the consumer’s perspective and is what consumers will understand.

The Options Transfers service regularly publishes aggregated MI from across the 90+ brands that use the service, to demonstrate end-to-end transfer process times. We recently published data showing that, since 2008, 75% of transfers via Options have completed within eight calendar days and 90% within 14 calendar days. Pre-Options, the reality was timescales of c.30 working days for pension transfers and c.50 working days for annuity transfers.

At the moment there is no end-to-end MI published on the re-registration process, which is a by-product of its complex and fragmented model – and we hope it receives focus in order that it can be improved.

What is important also to point out is that the organisations that appear in the MI are the good guys. They are the ones who are trying to do something about improving their transfer times and putting customers first. The focus needs to be on those organisations whose names are not on the list – and question why that might be.

Publishing MI means that distribution channels can start to see which organisations are putting customers first and offering better service.

This type of MI also informs platform due diligence. When advisers and paraplanners look at which platforms they might use, one of the questions they should be thinking about is; how quickly could I move assets elsewhere if instructed to do so? If platforms are putting their customers first, they will be on that list of companies trying to improve their transfer processes. This is even more pertinent in a marketplace that many expect to see consolidate.

So this is not just about improving transfer times, it is about improving communications with clients and setting expectations. Publishing the right MI supports the industry’s overall ability to provide better customer service.

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