Ian McKenna: Providers must be paper free by 2020

Ian McKennaDespite nearing the end of the second decade of the 21st century, too many providers’ communications practices are still more suited to 1820 than 2020.

I recently became involved in an online discussion with an adviser trying to operate a paperless business who was frustrated at a life company insisting on sending him a 73-page paper document, which then had to be scanned to the client record.

I will not go into who the provider is. As the adviser put it, “they are all a bad as each other”.

Life companies and platforms frequently bemoan the lack of technology adoption at adviser firms when they are far worse offenders themselves. These organisations need to start practicing what they preach.

Are advisers doing enough to keep client data secure?

Insisting on using paper when things can be digitised is, among other things, treating advisers unfairly. It creates additional costs for them and reduces their ability to become more efficient. This, in turn, increases the cost of advice. It is also being unfair to our planet.

Similar examples highlighted to me recently by advisers include an asset manager that sent an eight-page statement to tell an adviser they have a client with £7,000 invested with them, another that produced four pages for a £71.36 adviser payment, and yet another that sent 11 pages of transaction history for a £6,900 investment.

Then there was the life office sending 32 pages of plan information for a £6,000 pension and, in another case, seven pages for a £22,122 contract. I could go on, but it would just get boring. Needless to say, the closed book administrators are even worse.

New agency agreements and letters of authority are another area where advisers are bemoaning providers’ behaviour.

In the case of new agencies, why can’t organisations set up working practices so new firms can start as they mean to go on? Equally, with letters of authority, providers will happily accept faxes but not the digital equivalent. At least one organisation I am aware of has actually implemented technology to convert documents with digital signatures to faxes so they will be accepted. A ludicrous state of affairs.

Ian McKenna: Will your platform share client data?

When challenged, most providers will cite compliance and legal requirements as the reason for their byzantine behaviour, but such arguments simply do not stand up to scrutiny. The FCA Smarter Communications work comprising DP15/5, FS16/10 and PS16/23 transformed the art of the possible from a regulatory perspective.

There can be real benefits where wet signatures can be taken out of the equation. For instance, Aviva recently replaced its paper access to medical reports declaration with an electronic one. It tells me now it gets responses from doctors within 24 hours, on average, compared to a two-week turnaround when using paper.

Email security is a further area where both advisers and providers could do better.

Sending an unencrypted email is like putting a postcard in the post; anyone handling it can read it. In fact, it is worse than that, as criminals have very efficient “sniffier” programmes that recognise key information such as bank account details and comb the internet for unencrypted data.

While Origo rolled out its secure mail solution some years ago, it is fair to say it has not been adopted as industry standard. Indeed, an increasing number of alternative solutions are emerging, but this means many advisers are finding providers will not use their chosen secure mail service. There needs to be some consensus. Perhaps a handful of systems might be recognised for general industry use?

Ian McKenna: How tech incompetence could lose you 80 per cent of AUA

More and more advisers are embracing technology and looking to transform the way they work. As they do this, having to deal with any paper becomes a real problem.

Against this backdrop, surely it is time to put a deadline on it: platforms and providers should be paper free by 2020.

Over the coming months, I will highlight the leaders and laggards in this area. Who are the good business partners and who would it better to avoid until they get their act together?

Ian McKenna is director of the Finance & Technology Research Centre


Savings of 4,000 ex-Greyfriars investors now secure

The money of thousands of investors from troubled Sipp provider and discretionary fund manager Greyfriars Asset Management have been secured through an acquisition. Sipp administrator Gaudi has successfully transferred 4,000 Sipp and Isa accounts from Greyfriars onto its books. The acquisition agreement was signed on 21 September and has now been completed. Gaudi managing director […]

Tony Wickenden: Offshore investing shouldn’t be out of bounds

Negative headlines have made offshore investing look fraught with difficulties, but overlooking them could be doing clients a disservice In the lead-up to 30 September you may have read a bit about the “requirement to correct” with regards to the offshore investments of UK residents. You may also have wondered exactly what it was. The RTC […]

support service providers

L&G and Schroders lead in new City mental health network

Two dozen City firms including Schroders and Legal and General have endorsed a network to help young professionals combat the stigma of mental health. The ‘”Thriving from the Start” initiative, launched today, will be run by people in their early careers and aims to create a supportive community for recent joiners to companies in the […]


News and expert analysis straight to your inbox

Sign up


There are 7 comments at the moment, we would love to hear your opinion too.

  1. Amen!
    Here’s a really easy starter: Why don’t the providers accept a DocuSign electronic signature (with the audit certificate)?
    So-called “leading edge” platforms are little better.
    Having said that, I think market-forces may force the issue. Fully-digital platforms are out their and when starts moving the legacy platforms will be forced to follow.

  2. Thanks Ian for putting some weight behind this- the costs involved in dealing with paper and delays for clients is unbelievable- two things would instantly improved situation- 1. accept digital signatures of any description, a signature signed on a touchscreen is a valid as pen to paper and no ‘big’ IT build to accept this immediately 2. Stop sending post and find any mechanism to send an email when requested- again it isn’t hard- unipass is universally accepted by providers so why not their secure email – as a starter for 10!! #paperfreeby2020

  3. I am all for streamlining our processes digitally, however there is one problem that’s seems to keep reoccurring and that is of the elderly client.
    There is quite a large proportion of the elderly population that either do not own technology or if they do have no idea how to use it. These people still prefer paper and I am concerned in the next five years this group of clients will be completely alienated from advice and retail investment sector. This is a concern that needs to be addressed by both providers and advisers alike

    • David, I agree with Jane. It is the paper free client who is not getting the option and as to the elderly clients who don’t like electronic, they don’t like paper either, they just want to be able to deal with someone face to face and for that person to do everything for them with just one (on a touchscreen is fine)signature or even better a recording of voice and face of them confirming it is what they want. After all, they should be able to “make their mark” using an X, there is no legal requirement for their mark to actually bear any resemblance to their name, mine doesn’t and is a standing joke as it is a squiggle which was originally PGC and not PC, despite the fact I have no middle name as it had to differentiate between a colleagues mark which was PC.

  4. No one is saying this should be forced on a client- good providers already allow clients to mark their preferences. Oddly enough though, many of my older clients are very good users of technology and would love to not have paper. It is horses for courses- as is everything in life- but at the moment the ‘paper-free’ client isn’t getting a choice.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com