Richard Jacobs Pension and Trustee Services
How has your pension switching process changed one year on from the 2009 FSA pension switching review?
Amphlett:We barely changed them at all. We have our own in-house compliance system that manages every stage of the pension switch. This is an internal web-based compliance system – everything that the FSA was concerned about really did not concern us because every one of our advisers who has to go through the switching process has to go through the web-based process, so they are compliant.
Jacobs:We found the review extremely helpful as it aided us in identifying one or two areas where we were able to improve. That really surprised me because we thought we were robust but it was very refreshing to see we could make improvements and we have put them in place. I was really amazed to see the results of the initial investigation. I was sceptical at first but during the seminars at Canary Wharf. We were given real case studies and they were appalling, so the FSA was obviously wholly justified to do the review.
Has the introduction of Origo Options (P2P) reduced the time taken for pension switches from one provider to another?
Amphlett: I see the statistics that are published and I see the boasts of significantly improved times but it always depends on the case and the provider. We have not seen a significant change ourselves but we always tend to stay on top of each case. The bad guys are still the bad guys and they do not subscribe to Origo anyway. In general, everyone is aware of the need to transfer funds more quickly.
Jacobs: Origo has helped but, interest-ingly, I have had a case where the speed worked against us. We sent the papers in pre-retirement age but the process was so fast everything was dealt with before his retirement age. The money came out too early and the client was penalised. That was unfor-tunate but generally it is ok. We are not seeing too much of an improvement though, it has to fit the comp- anies involved at the moment and that is less than a third of firms.
How easy is it to obtain underlying information such as details of guaranteed annuity rates or the charging structure from providers on existing personal pension or stakeholder plans?
Amphlett: Because we have a web-based process, we are very prescriptive in what we ask for and how we interrogate the information that comes back. So we know depending on the provider what we need to ask for. When that information comes in, we have a data entry process so if we have anything missing we will go back and ask. Again, there are the bad guys who simply ignore what you ask for and send what they always send.
Jacobs: It is getting better because more companies are realising they have to offer this information as standard but it is still time-consuming, maybe taking several weeks if you have to ask for it. One of the big problems is that the contracts with guaranteed bonus rates and guaranteed annuity rates are invariably the older contracts and they are invariably not on IT platforms.
As a result of the speeding up of switches due to the introduction of Origo Options (P2P), do you feel that there is less need for tracking processes?
Amphlett: We haven’t needed to exercise less tracking. We wouldn’t because of human error and backlogs in various companies. Just because they are a member of Options does not necessarily mean all their processes are up to date. A firm is as only as good as its internal backlogs
Jacobs: There is absolutely no need to track less. It is appalling to see the number of slip-ups and errors coming through this whole process.
Has there been any improvement in the ability of providers to integrate with your client management system for population/pre-population of illustrations, applications, tracking or commission details?
Amphlett: No, definitely not. Our disappointment has been that providers have largely used paper-based processes, which I find incredible in a digital world. We deal with most of our clients online but when it comes to dealing with the providers, it is on paper.
Jacobs: If it is available, we do not use it. Certainly, we will go onto the provider’s website and see where the application is but there isn’t anything that interfaces with our software. That invariably means we are on a manual diary chase, probably by email where we will get a reminder out.
What do you feel are the main barriers to online submission of business?
Amphlett: One of the biggest bugbears is the application form, which largely has to be hand-filled. They say we can use their online quotation processes but the information is already in our systems, so we have to rekey it into their systems. They also say we can use a platform but again we already have the information and we have to rekey. They also all have slightly different ways of asking for the information, so we have to go to four or five websites and key things in each time.
Jacobs: Older contracts where we are asking for more information are not on their databases. Things will change in time but these firms are not putting money and time into their old policies and we can’t ask the insurance comp-anies to spend a lot of money to put a handful of old policies onto their systems.
They are doing well with the new stuff, the old stuff will forever grind on. E-commerce for most pensions providers is still a dream because the big providers have so many generations of policies going back decades. They might come in and show you their wonderful interface on their latest stakeholder personal pension but ask them to have that on a non-profit deferred annuity, you haven’t got a cat in hell’s chance.