Pensions Re-registration Roundtable
Four leading pensions providers are calling for greater use of automated pensions re-registration (aka in-specie transfer), in a roundtable hosted by Origo, the not-for-profit, fintech company.
Origo brought together representatives from AJ Bell, Aviva, Liberty Pensions and Zurich to talk about the issues the industry faces in terms of pensions re-registration.
There are changes coming (including Pensions Dashboard and the shift towards greater use of collectives in pension funds) that, if the market is to deliver the right outcomes for consumers – i.e. by significantly speeding up transfer times – will need automation of processes and systems.
Key points from the roundtable included:
• With the average ISA and pension taking 8 -12 days to transfer, financial advisers are often perplexed and frustrated by the fact that the pensions re-registration transfer, can take so much longer - due to providers operating manual processing systems.
• Paper-based manual systems are delivering poor outcomes by creating delays and slowing down the end-to end process – the time frame that matters to consumers and their IFAs. They are also costing providers time and money.
• Ceding firms (transferring money out) can save money by automating their processes, because of the processing overheads and time saved.
• A greater number of retail clients now are buying into pension products that invest in collective investments, unit trusts and shares etc. – and so automated re-registration is going to become more important.
• Managing expectation around transfer times is key, in particular where a pension may hold illiquid assets. There can be no guarantee that a transfer will complete in ’x’ days.
“Digital is how a lot of customers and financial advisers want to go.” (Maria Nerney – Aviva)
“The demand for a better process has always been there and the number of customers that it could work for has also increased. It is, therefore, more relevant than ever that we get more organisations on-board and keep pressing forward with automated re-registration.”
(Stephen McHugh - AJ Bell)
“Showing the industry that re-registration can be simple, quick and efficient is essential to begin to change thinking in this space… I think the second that we start to publicise hard data that shows demonstrable improvement, then, I think it will really resonate - certainly with the adviser community.” (Justin Pearson – Zurich)
“Options Transfers offers key benefits such as the speed in which a pension re-registration is done electronically over paper – it is proven. And the customer outcome is the fact that they know where they are with their transfer.” (Paul Wheatley – Zurich)
“Re-reg is a process whose time has come.” Pre the Options Transfers service, “people didn’t think we could do it with [automated transfer of] cash, but we did. It’s not a massive leap to get from cash to re-registration. It’s getting people to join us in taking that leap.” (John Fox – Liberty SIPP).
Paul Pettitt, managing director of Origo, said: “Automated pensions re-registration has of late, been in the shadows of DB-to-DC transfers media spotlight. Our aim with the roundtable is to ensure that we keep our efforts and those of the industry focused on the range of products and transfers types that are available to the consumer - and that regardless of products involved, the transfer process is safe, fully auditable, monitored and timely.
“Re-registration offers many benefits to the consumer, including not having to liquidate assets (sell and re-buy) which could cause a taxable event, as well as keeping the consumer in the market.
“Automation of the process also helps to speed up the transfer process and offers organisations significant cost efficiencies in streamlining their administration processes as well as offering MI on their performance and records for auditing purposes.
“We are grateful to the representatives from AJ Bell, Aviva, Liberty Pensions and Zurich for their time in discussing this important subject for the industry. This roundtable offers similar organisations – who are considering extending their automation capabilities to include pensions re-registration – an insight into not only the benefits but the considerations organisations undertake when adopting a new, improved process.
“What is clear from the output of the roundtable is that the upward trend of pensions re-registration is only going to continue due to a number of factors discussed. Pension Freedoms, especially, have led to more innovative and flexible products and this new, modern product type will continue to evolve and as such, we can expect to see more transfers.
“The ability to process pensions re-registrations has been available through Origo’s Options Transfers service for some time. Making sure that members of the Options community are fully aware that this functionality exists is paramount to ensuring its continued use and benefit.”
Download the roundtable transcript from www.origo.com/roundtable