A Transfer of Delight by Richard Bradley, Platforum
I started a pension transfer at lunchtime last Wednesday. It took me a total of seven minutes to log into AJ Bell Youinvest and ask (all online) to transfer an Aviva workplace pension into my SIPP. I had an immediate email confirming my request; Aviva had closed my account by Friday; I had an email from AJ Bell confirming the transfer and amount on Monday and the funds were in my account that evening. Three working days from start to finish – the same as an old BACS payment – and with no paper or wet signature.
Both AJ Bell and Aviva use Origo’s Transfer Service. Last week Origo published the average ceding times for (some) groups that use the service, with an overall average of 9.3 calendar days. It’s great to see some positive news on this front – it’s usually only examples of the most egregiously delayed pension transfers that get picked up by the press. So hats off to Origo, Aviva and AJ Bell (*other platforms are available).
Efficient pension transfers are set to become ever more important as more money heads into auto-enrolment schemes. As of this 6th April, minimum contributions have risen to 8%. A significant proportion of the UK population is now paying into a pension – many of whom wouldn’t consider themselves ‘investors’ – and the amounts are not trivial. These customers will be switching employers from time to time, so pension switching will undoubtedly rise. It’s vital that the industry puts its best foot forward and offers a standard of service that customers will expect.
Over in adviser land, the main rationale for switching clients between platforms is also its biggest barrier: suitability. A recent Platforum survey found that three-fifths of advisers regard the burden of assessing suitability as a barrier to switching. But the FCA has been clear that ensuring platforms are suitable is part of an advisers’ ongoing service. Catch-22. (AJ Bell Investcentre and the lang cat published a report on this on Tuesday for those interested.)
Platforum provide research and their work covers the adviser, direct-to-consumer (D2C) and retirement markets, the influences in fund distribution in the UK and the investment distribution landscape in EU and Asia.
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