Lucky no. 7
Posted by Victoria Green on Tuesday 29 September 2015 at 16:49
Origo Options Transfers service – a positive force within the financial services industry
£70 billion transferred successfully, 70 brands on the service and 7 years in smooth operation - for some, the number 7 is significant. Be it a 7-year itch, a lucky number or simply a good point to look back and review the hard work that has enabled consumers to benefit from faster pension transfer times.
With the recent publication of the FCA paper and the deadline looming for responses to the Treasury's paper; the spotlight has never been more clearly focused on the pension transfer process. Pension freedoms are certainly, and rightly so, helping to ensure that for consumers, the processes around the transfer of pensions are indeed consumer-friendly!
For well over 7 years, transfers have been a particular focus for us. Making the process of open market option pension to annuity transfers was the starting point, quickly moving to pension to pension and then pension to drawdown transfers. Occupational pensions are now included as well as re-registration of ISAs, GIAs and SIPPs - and now the launch of the Bulk Transfers service. Perfect for the movement of schemes from one provider to another, the Bulk Transfers service is another step towards ensuring that nearly every kind of transfer needed by a consumer, whether implemented via an administrator, scheme, platform or provider, can be managed through Options.
Our Options Transfers service has come a long way and to help put this into perspective:
• £70bn plus has been transferred since launch
• 50,000 transfers go through the system a month (and this has been growing quickly since April)
• 6 calendar days is the average time to complete a transfer - quite a fall from the average of 10 weeks experienced in the old manual world! Even better, some go through in as little as 45 minutes.
• 70 brands (making up over 50 financial institutions) are now using the service.
It hasn't all been plain sailing but there is no doubt that from the day it was set up, 26 years ago, with a mandate to help financial services companies become more efficient, more cost effective and better able to serve the end consumer, Origo has been working for the benefit of the industry.
The raison d’etre – serving the industry and the consumer
Origo has a unique position in the industry in that it was established by financial institutions that got together to create a single service that is managed by an industry supported, not-for-profit body, and which successfully works for them and the end consumer.
The fact that Origo is a not-for-profit organisation is incredibly important as it means that while ultimately owned by its supporting institutions, there is no employee ownership and all surplus is reinvested into its services for the benefit of the industry.
Origo works collaboratively with financial institutions, including other industry bodies and stakeholders, to design, develop and implement standards and services in a way that ensures they are fit for purpose and do what they say on the tin.
For example, the standard process of the Options Transfers service was designed in this way, collaboratively with financial institutions with the simple purpose of improving customer outcomes.
Origo’s role in these projects, through its steering groups, is to ensure that the process remains inclusive, and ultimately works to deliver efficiencies for consumers (in the case of Options by significantly reducing transfer times) and the industry (by helping to remove cost from their businesses) and improve outcomes).
Enabling the industry
Origo’s Options Transfers service has enabled transfer times to be reduced from 10 weeks to 6 calendar days (with some happening in minutes), which is great news for consumers. With over £70bn transferred since launch in 2008, Options Transfers has helped to radically improve processes for platforms, providers, TPAs and Master Trusts and the recent recognition from the FCA for the good work Options has done further underlines this. For us, our customers, other industry groups, the numbers and evidence strongly supports the Options Transfers service as an extremely positive force in the industry. Indeed, it is fair to say that Origo’s central role, working with the relevant parties, creating the technology needed and solving the legal issues, enabled the industry to step forward, significantly reducing transfer times for consumers. Importantly, Origo continues to maintain and develop the service as needed.
Origo was established in 1989 by 16 financial institutions, all quite different in their makeup, all of which remain as supporters (albeit for some under different names). These financial institutions, our shareholders, are pretty strong, which means that Origo has solid backing and that we work to institutional governance standards.
Those companies also are incredibly supportive of our work because they have first-hand experience of the benefits we deliver. But they don’t have the only say in the service – it is the steering groups made up of Options users that work closely with Origo to determine development and change priorities – this is fundamental to ensuring the service continues to be successful and attractive to the whole pensions industry.
By having customers, and shareholders also as customers, as an organisation we actually have to listen to them, understand their requirements and their stakeholders’ requirements. This has to be balanced with any wider market requirements and meet institutional standards on security and a range of other matters. In other words, it has to meet many requirements, whilst also delivering consumer and customer benefits.
What also differentiates Origo in this market is that due to our set up, with no employee ownership, looking for a profitable exit is certainly not an issue for the industry it serves. Origo’s motivation is to improve customer outcomes through improving the industry. We expect to be around for the long-term.
A key feature of the Options service is that the 70 plus companies now signed up to it know they are operating within a trusted user base. Origo leverages its customers’ market knowledge to ensure that for new joiners, its Due Diligence is second to none. Creating and maintaining a trusted transfers network that is treasured by our customers means that we're extra careful; this not only benefits Origo participants but also, importantly, means consumers are properly protected. Everyone is hugely concerned to ensure the industry is maximizing its efforts to weed out ‘pension liberators’ and that’s why Origo takes its Due Diligence responsibilities seriously.
Working for the end consumer
The way we tackle our projects is this: Let’s put the customer first, and then use the best technology to deliver to the customer. For us, selecting and using a model that drives the best outcome for consumers, a model that is fit-for-purpose, cost effective, and actually delivers, simply makes sense.
What doesn’t make sense, is putting together solutions with alternative technology that will only benefit technology suppliers and, more importantly is not fit-for-purpose, resulting in increased cost and additional complexities to financial institutions, a cost that, ultimately, the consumer has to pay.
Taking an honest and open look at how we operate and why we operate is a worthwhile exercise for ensuring that as the industry’s eCommerce standards and service body, we continue to deliver to what is required. Requests for new developments, dealing with changes in regulation and legislation and launching new services is both exciting and rewarding and after 7 years, taking a breather to take stock is reassuring. Here's to another 7 years of excellence and innovation.
 FCA pension freedoms data collection exercise: analysis and findings – September 2015 https://www.fca.org.uk/news/pension-freedoms-data-collection-exercise-analysis-and-findings
 Pension Transfers and Early Exit Charges https://www.gov.uk/government/consultations/pension-transfers-and-early-exit-charges-consultation
 FCA pension freedoms data collection exercise: analysis and findings – September 2015
Automated bulk transfer of pension schemes is the next step to significantly improve member experience, says Origo Managing Director Paul Pettitt
Posted by Victoria Green on Wednesday 16 September 2015 at 15:38
There is a government spotlight turned on pensions providers at the moment, focused on the member experience, leading in turn to pension provider systems and processes coming under greater scrutiny.
When you look at the pensions market and where and how technology is being employed to deliver hugely improved systems and service to both providers and consumers, there is one area that stands out as needing attention – bulk pension transfers – the transferring of a pension scheme’s members from one product provider to another.
The fact is, processing of the high volumes of data such as carried out in bulk transfers when done manually, often using paper-based systems mixed with large, complex spreadsheets, is simply not going to stand up to that scrutiny as it can severely and negatively impact the member. This, in turn, will have a detrimental affect on the reputation of the schemes and third party administrators (TPAs) involved.
To carry out a bulk transfer, considerable data and information on payments and entitlements has to be collated, monitored and passed between the ceding and receiving parties. As a result, manual paper-based transfer processes are open to a range of disadvantages:
• Delays in the sending and receiving of data by organisations and the member
• Issues around accuracy of transfer information
• Formatting errors
• Delays and costs of manually updating information
• Keying errors
• Communication breakdowns between scheme and providers
• Contacting and dealing with counterparties to progress the transfer
• Data transfer issues
• Data security issues
• Out-of-market issues.
All of the above inevitably lead to higher costs and higher risks for schemes, TPAs and ultimately, members.
The fact is, current manual and paper-based systems have fallen behind the times both in what is possible in the industry and in what increasingly technology-savvy members expect and require of their pension providers and administrators.
When undertaking a bulk transfer, the scheme should want the process to be undertaken as swiftly, accurately and cost effectively as possible, without any negative impact on the member experience.
Automating bulk transfer enables processes to be better controlled and the majority of the issues listed above to be resolved. Importantly, it can also lower costs and risks for all parties, including the scheme members.
How we see a bulk automated transfer system working
The first step is the creation of a trust framework that is signed up to by every potential transferring counterparty. This trust framework would be adopted equitably and each party would be aware of its obligations and rights. This framework would enable the receiving party (for contract-based schemes) to collect consent from each member on behalf of the ceding party at the point of application. This minor change would mean an end to paperwork and all the inefficiencies that that can create between organisations and individuals, ultimately slowing down the transfer.
A similar framework is already being used successfully in the individual transfers market in the form of the Common Declarations, a free, openly available standard developed by Origo. This standard set of words enables the receiver to collect consent and confirm lifetime allowance limit in one place, at the point of application, on behalf of the ceding party.
The following practical steps would see the process through to completion.
First, the system would define and all parties would agree, ahead of any transfer, the information that is absolutely critical and common to effect a transfer. This would remove any uncertainty, confusion and save administrator time.
Relevant, formatted CSV files could then be created and uploaded to a secure service, ridding the process of any data security risks that emailing CSV files can cause.
Any changes and updates to the information gleaned from the CSV file would also be conducted through a single, secure point by each transferring counterparty. That way, there would be no confusion as to which file, or information about a particular member or even an entire scheme, is the latest and most up-to-date.
All of these changes would be recorded for future auditing purposes and any changes automatically notified to the other transferring party. In addition, it would be flagged if any action were required in order to progress the transfer.
A secure bulk transfers hub could also provide the contact information of the teams and individuals responsible for administering the transfer, preventing any delays that may result by going through a call centre.
Finally, the ability to send secure notes and attach notes to certain members and schemes to cater for any unusual changes or circumstances would also help ensure all transferring parties are kept abreast of any anomalies in an efficient and fully auditable way.
Further benefits for providers and TPAs would include secure, automated monitoring and co-ordination, as well as prompting of actions, and full MI and audit trail for review and compliance requirements.
Automated systems, like Origo Options Transfers service, designed to process transfers in the contract space, have already reduced pension transfer times to as little as 45 minutes – a massive reduction from previous 10 week average.
Hence, as automated bulk transfer systems are made available in the market, they will hugely and positively impact pension scheme and TPAs’ processes, procedures and costs, as well as, most importantly from the government’s perspective, the member experience.
Posted by Victoria Green on Wednesday 19 August 2015 at 15:21
Have you heard of life hacks? Or even better do you have one you’d like to share? If you’re new to this phrase I’ll quickly explain. It’s about the little things, simple things, you can do that make your life easier, better or more efficient. For instance, using nail polish to identify different keys or using a paperclip to stop the end of the tape getting lost. Easy right? Little things that just make life easier and remove stress.
So are there little changes we can make to make pensions easier? In the world of transfers we’ve tried to do just that – a super hack of little things to make all our lives easier. Little things like; calling a number and getting through to a person who actually knows what transfer case you’re talking about, not a machine. Little things like; removing multiple paper forms and wet signatures and turning it in to one, online secure application form. Sometimes it’s the bigger stuff too, like knowing you can do a speedy transfer with one or 70+ brands on the service.
The awkwardly slow, costly and complex nature of pension transfers back in 2006-2007 were the reason we were asked by the industry to look at solving the problems. So, how do you eat the elephant? Little by little. So we started to eat away at the elephant, solving the problem by looking at the key areas where both consumers and organisations needed these #lifehacks. How can we make contacting each other easier? How can we get rid of the paperwork? What would simplify this process for everyone?
We started with pension-to-annuity transfers, quickly followed by pension-to-pension and drawdown. Today the service is capable of managing in-specie transfers (AKA re-registrations) as well and we’re now a month away from tackling the mammoth that is bulk transfers (watch this space for September launch). Options is designed around life hacks. And being designed out of a need not a want, the service has continued to grow and develop.
Industry body, not-for-profit, pioneer. That is what we are. It’s really a great thing not being commercially motivated as it gives us the ability to really listen to the industry, assess needs and address them effectively. Any profits made are wholly reinvested in to the development of our services. That’s why and how it keeps on evolving. It continues to evolve because of the wonderful community we have. That supportive, innovative group of providers, platforms, SIPP providers and Third-Party-Administrators and many more who all drive the service forward. It is the users of the service that decide, shape and push through all the developments and through their input Options continues to reduce transfer times and improve the way our industry works.
The nicest thing for us is that organisations continue to join – a true testament to the services. We’ve already had another two organisations join this month and we’re pleased to say no-one has ever left the service. We don’t have lifetime contracts with our customers, (and who’d want one?) no one has ever left because, let’s face it… it works. The ability to #lifehack your pensions transfer process saves you not only a significant amount of time, money and paperwork but it also reduces the stresses and strains your organisation will face every day. Little things like instant access to MI, real-time contact with receiving and ceding parties, the removal of paperwork instantly speed up the process never mind the actual automation of the transfer itself - making the service even more efficient.
We could all use a #lifehack or two, so why not in your pension transfer process?
We’ve been expecting you… Mr Bond
Posted by Victoria Green on Tuesday 11 August 2015 at 09:44
KGC recently presented a fun session at the Pensions & Benefits Show 2015, the theme was based on James Bond and sought to emphasise the role technology has to play in today’s pension provision. Amongst others, the session looked at the use of modern gaming technologies like oculus rift. It creates a virtual world where members can see their future lifestyles. They can model and adapt it by changing their contributions and/or changing when they retire. This is probably one of the more sexy bits of technology it gets people excited as the thought of creating a virtual world becomes more of a possibility – just like star trek's holodeck.
We also looked at more boring but necessary uses of technology, such as the growing integration between administration platforms, investment platforms and actuarial modelling tools. Providing real time information so actuaries can say, 'push the button on that buy out - it's the optimum moment’. We felt technological development for Defined Benefits schemes and Defined Contributions schemes had different focuses. For DB more focus is on providing information for schemes and advisers to help with de-risking journeys, whereas DC developments are focused on the member and engaging with them.
An area we touched on which affects both DB and DC members is that of the new DC freedoms. We made a flippant remark about members needing a tax consultant as opposed to an Independent Financial Adviser, but this 'joke' is based on the growing need to understand tax implications on retirement. A number of providers are creating retirement planning tools which take a holistic look at members’ total retirement savings. It’s aimed at directing them to the most appropriate means of taking their retirement income, not only for their lifestyle choices and personal circumstances but also from a tax perspective.
We know most people who have already taken advantage of the freedoms have been members with smaller pots. We’re yet to see members with larger pots of money make their choice. When they do use these tools it can only be seen as a positive even if it's only to help them ask the right questions of an adviser.
But, we’ll increasingly see members wanting to take more sophisticated decisions around how they take their retirement income. Currently many arrangements and particularly trust based schemes, are not looking to provide all the options available under the freedoms. With income drawdown, there may be a reluctance for trustees and employers to be responsible for members in retirement - that's what DB schemes are for. In these circumstances we’ll see members being guided to a suitable vehicle where they can take full advantage of the freedoms, notably income drawdown.
We’ll see members transferring benefits to vehicles specifically set up to provide for DC freedoms - another stream of transfers for administrators to contend with! KGC worked with Origo last year and as part of the work undertaken, we asked third party administrators (TPAs) about the volumes of transfers they transact. We also asked about the man hours needed to carry out the work, which is still quite a manual process. Interestingly, most TPAs weren't able to provide this information, they did say it was an area that caused them pain and was a constant source of complaints - members' faults obviously as they lose things and forget deadlines for guarantees.
So, back to ‘Bond’ - using technology to help pensions. With DB to DC transfers, transfers to 'freedom vehicles' and ordinary transfers on the increase, who can help administrators with a technology solution for the growing number of transfers?
Lesley Carline, MA FPMI
For more information on how technology is developing in pensions and particularly administration contact Lesley for the latest and sixth KGC administration Survey.
Where next for piñata’s…sorry, pensions.
Posted by Victoria Green on Monday 20 July 2015 at 14:56
We invited Tim Middleton from the PMI to tell us a little more about his views on the recent pension freedoms what it means for DC and his views on whether the recent changes demonstrate good news or bad news for organisations and members – are pensions the next piñata for the government?
“On 16 June, George Osborne made the first formal announcement concerning public demand for the new decumulation options. He announced that 60,000 DC members had taken advantage of their new options and that approximately £1 billion had been withdrawn from DC funds. Calculated as a mean average, this works out at less than £17,000 each.
In the absence of any detailed information, it is difficult to assess the circumstances of those who have to date chosen to cash out. We don’t know what other forms of pension saving they might have or what other financial assets they might own. However, a DC pot of £17,000 is only likely to be of value when taken as a cash sum. Anecdotal evidence suggests that those with larger funds have not so far been part of Osborne’s stampede and fears of feckless fiftysomethings blowing their life savings have proved unfounded.
However, it is clear that the Government is not entirely satisfied with progress to date. Osborne has also announced that HM Treasury will consult in July on problems that have arisen that prevent eligible DC members from accessing their cash. The principal area of concern is the imposition of exit penalties. These, in the main concern older pension policies, representing adviser commission. Osborne is suggesting that a cap may be applied to prevent ‘excessive’ exit penalties being applied. At face value, this seems reasonable, and would provide a policy that could happily be adopted. However, viewed in ideological terms, this is actually rather odd. Osborne is actually proposing direct governmental intervention in a market in order to restrict costs to consumers. This seems somewhat at odds with the views of a Government which baulked at the suggestion of rent controls or fixed energy prices.
Whilst George Osborne appears to be championing the consumers right to choice, we should reserve the right to query his motives. Why does the Treasury have such a strong vested interest in seeing cash taken out of DC pension savings? It certainly appears that George Osborne sees his Freedom and Choice agenda as a means of increasing tax receipts. Pensions policy should be formed with the long-term objective of improving retirement prospects for citizens rather than the short-term financial objectives of the Chancellor of the Exchequer. We need to be cautious of a Government policy that seems increasingly inclined to view the pensions system as a form of financial piñata.”
Tim Middleton, Technical Consultant, PMI
There’s too many of them…
Posted by Victoria Green on Monday 20 July 2015 at 14:49
As you’ll know if you’ve seen any zombie film, there is strength in numbers. It can be overwhelming, unmanageable and frankly quite frightening. Like our zombies – slow, unnerving and lots of them – the very thought of bulk transfers can make some of us hide behind the sofa. But what exactly is it about bulk transfers that makes us wince?
1. They’re vast
There is not just one member’s transfer to consider, there are hundreds and even thousands of members in some larger schemes.
2. They’re complicated
No, it’s not just as simple as hitting the play button on the DVD player. Conducting a bulk transfer is complicated. Consent has to be gathered from every single member (if the scheme is contract based) and then there is all the information that has to be pulled together, checked, updated, rechecked – all of which can take weeks or months.
3. They’re risky
Okay, not as risky as facing a horde of flesh eating monsters with nothing but a tea towel to hand, but still, bulk transfers can be risky business. The fact is with any manual transfer process there are more risks involved, and when you suddenly multiply your volumes by a few hundred the risk of errors, naturally increases exponentially.
Put all of that together and add some communication black holes where information might be forgotten, misplaced or lost during the back and forth between organisations, and you have yourself all the ingredients needed to make a decent pension transfer horror film. Our villains - volumes, risk and complexity. Our victims - the unsuspecting scheme members who could be exposed to out of market risks and delays. And, last but not least, the hero of this piece? Who has the antidote that can save mankind? The Scheme Administrator of course!
Whether you are an employer, a third-party administrator, an employee benefits consultant or a master trust, bulk transfers no longer have to be dealt with via paper and unsecure spreadsheets. Origo is in the process of developing a bulk transfers service enabling all parties to save time and reduce costs while securing and streamlining the entire process and removing paperwork.
Origo, the eCommerce standards and services body, has been providing the industry’s only complete transfers service for over eight years – the Options Transfers service. The service enables the industry to reduce costs, drive efficiencies and improve member outcomes through faster individual workplace pension transfers. And later this year they are releasing the first ever service to tackle bulk transfers – much to the relief of the Scheme Administrator and the member hiding behind the sofa.
The new bulk transfers service will enable organisations to benefit from the existing Options functionality that has already reduced transfer times from months to minutes. The service will enable organisations to:
- Remove paperwork
- Speed up processing
- Simplify and standardise CSV files
- Improve security
- Access full MI and audit trails
- Receive quick and clear status updates for teams
- Quickly and securely contact ceding or receiving parties
- Simply manage and gather member consent
There may be many challenges to effecting and controlling bulk transfers and while it may seem like there’s no silver bullet (or in our zombie apocalypse scenario, no cure!) Origo has worked with the industry, to identify common problematic processes and provide organisations with the tools they need to process bulk transfers in a secure environment while speeding up the entire process. Cue dramatic ending to the horror zombie movie (dun-dun-duuuuun!) and put an end to any hiding behind the sofa thanks to Options and faster transfer times.
To find out more about Options Transfers please visit www.optionstransfers.co.uk
Your 60 seconds starts now!
Posted by Victoria Green on Monday 20 July 2015 at 14:34
The People’s Pension talks pension transfers with Origo.
For many organisations, transferring pensions brings several things to mind. Firstly, paperwork. Mountains of discharge and LTA forms which can get lost, need re-work and then lots of chasing. Secondly, the time it takes to conduct a paper-based manual transfer. It can be a slow process which can take weeks and involve the time of a dedicated team, or teams in some cases. Lastly, lack of control and the associated risks. Without efficient case tracking the reconciliation of cases, and various monies, becomes an arduous task, making it all the more difficult to keep the member up to speed with their transfer. But, it doesn’t have to be this way, there is another way, an easier way which gives you full control – automation.
Justine Pattullo (eServices Adoption and Marketing Manager, Origo Services) interviewed Chris Reilly (Pension Transfer Manager, B&CE) to find out why B&CE chose to automate their transfers through Origo’s Options Transfers service – the industry’s most complete pensions transfers service.
Identifying needs: How did you recognise the need for faster transfers within your organisation?
At B&CE and The People’s Pension we are continuously looking to improve both the efficiency of our processes and the service offered to members of our pension schemes. There wasn’t any one driver for us but as the volume of members grew in our schemes, so did the number of transfer requests.
We knew there were opportunities for us to continue improving our transfer processing and signing up to the Options Transfer service was a logical step for us.
Key benefits: What did you see as the main benefits to automating your transfers?
We were fortunate in that we have never had long turnaround times and were able to process our transfers efficiently before we implemented the system. But we were, of course, still hamstrung by having to use the postal service and the inevitable paper chase that exists when processing transfers outside of the Options service.
Paper discharge forms, chasing to ceding schemes for updates, information being sent to the wrong departments, all are now thankfully a thing of the past.
Choosing a service: Why Options Transfers?
We analysed the level of transfer requests we received, both as a receiving and ceding scheme, to see which other institutions we had the most contact with.
Armed with this information we could investigate services in the market to see what offering would best meet our requirements. All of the other providers we knew we had to regularly interact with were signed up and using the Options platform. So market coverage was really key for us.
Getting set up: Did you receive all the support you needed from the Origo team?
The set up and system orientation were excellent. Like many things when you first look at a new system it can appear daunting. But two things really helped our teams get to grips with the service. Firstly, the support from Origo was very comprehensive, we had in house training and being able to work on cases with the experts there was very useful.
Secondly, the system itself is intuitive. If you understand the transfer process as our teams do, then getting to grips with the service is quite straightforward. The interface is simple and easy to follow. Once you have navigated a few cases it becomes second nature.
Impressive features: What surprised you about the service?
Well the speed of the system and the overall ease of use was refreshing.
A recurring problem we used to face, before Options, was matching and identifying payments when they came in. Now every payment has a reference and is easily reconcilable.
Team benefits: What are the main benefits you have experienced since going live on the service?
There are many benefits of the service, but being able to ask members just to sign our transfer application and then using the Common Declaration as the ceding scheme discharge form has just cut out so many steps from the typical non Options transfer.
Historically the industry has asked any member wishing to transfer their pension to fill in at least two forms. One to tell the receiving provider they want to transfer their old pot, and another to tell the ceding scheme they want to transfer out. By simplifying the process through the Common Declaration it is now much simpler. Members are no longer faced with a long discharge form full of technical jargon they don’t understand. They can just sign the application form and let the two providers deal with the administration.
Member benefits: Do you feel Options Transfers has enhanced the service you are providing to members?
Yes, and in many ways.
Using the service simplifies the process for all involved, both for transfers in and out of any organisation. Members can sign one form with their new provider and not have to deal with further forms coming through the post weeks after the original request.
The whole process can now be completed in days, rather than weeks. We can see the status of all our live cases so our administration teams can monitor and review the transfer pipeline which allows us to proactively review cases or get updates in real time.
B&CE, the provider of The People’s Pension, joined Origo’s Options Transfers Service in April 2015. Alongside 70 of the other leading financial services brands now speedily transferring pensions, Origo expects to see more Occupational Pension Schemes join and enjoy the benefits of the Options Transfers service.
Annuities are dead. Long live….. Annuities?
Posted by Victoria Green on Tuesday 16 June 2015 at 11:23
In 2012, the Financial Conduct Authority found that 60% of annuities were purchased from the provider with whom the individual had saved. It was further reported that 80% of these annuitants could have got a better deal had they only shopped around, a figure which jumps to 90% had they qualified for an Enhanced Annuity. This was what the Open Market Option (OMO) was created for, however 40 years on and OMO has yet to fulfil its promise.
So fast forward to today and we have a market constrained by inertia. An inertia that has clearly been a driving factor in creation of the Pension Freedoms legislation upon us. We anticipate new products and annuity structures, more people choosing Income Drawdown or Phased Retirement, and potentially the resale of purchased annuities. Retirement is changing, and products are changing with it.
So while annuities are no longer the only option, they’ve not quite been retired (pardon the pun) the way we thought they would be. And this can be a good thing. Guaranteed income will always provide a level of comfort certain consumers want.
One thing is clear though. It’s all about engagement - consumer engagement. How can we generate enough excitement and interest around pension choices to encourage the consumer to actively engage with the industry?
That’s a big question, and it’s one we could debate from dawn until dusk without clear resolution. However there are small steps we can all take as an industry to make inroads, and that’s just what the ‘Common Quotation Request Form’ (CQRF) is doing.
An established health and lifestyle questionnaire developed by pension annuity providers to help underwrite enhanced pension annuities, the CQRF form enables specialist annuity providers to determine whether a customer may benefit from extra annuity income in retirement if their life expectancy is reduced by virtue of their health and/or lifestyle. For example, if they smoke or have a health issue such as diabetes or a heart condition.
The original CQRF, now rebranded as the ‘Retirement Health Form’ (RHF), was designed for use only by intermediaries and over time subsequent updated versions of the form been made available on a website for intermediaries to download. This website, has now been revamped by a forum of specialist annuity providers, working with Origo and The Annuity Exchange. This includes the majority of the annuity providers who specialise in offering underwritten enhanced annuities, that is, Aviva, Canada Life, Just Retirement, Legal & General, LV=, Retirement Advantage, Partnership Assurance and Prudential.
As well as the very latest RHF available for intermediaries, the website now offers access to a consumer version of the questionnaire, helping consumers to take control over their potential income vehicle through retirement.
Access to the intermediary version is via adviser.retirementhealthform.co.uk and the consumer version of the site is via www.retirementhealthform.co.uk, with the ongoing management of the website, including any new developments, supported by Origo, the eCommerce Standards and Services body for the Financial Services industry.
Speaking on behalf of the Annuity Providers Forum on the new developments, Tim Gosden, of Retirement Advantage said: “A new website was needed primarily to ensure that both consumers and intermediaries can download the latest version of the questionnaire. We recognised that some consumers prefer to purchase their annuity without the involvement of an intermediary and so a separate version of the RHF was required for them. The facility for intermediaries to be notified of new versions of the questionnaire is likely to be extremely popular and will hopefully ensure that fewer ‘older’ versions of the CQRF remain in use.
“While intermediaries will usually want to download the complete form, consumers can now select and download only the sections of the questionnaire that are relevant to their personal circumstances. This simple step makes the process easier for consumers and will hopefully reduce the resistance people have when faced with what appears to be a complex form.”
Herding cats? I've just the tonic
Posted by Victoria Green on Friday 15 May 2015 at 14:36
There is this gin bar in Edinburgh… It’s been in the same location for many, many years. I don’t get to go that often, but it surprises me that when I do suggest it to friends, how little some know of its existence. But in certain Edinburgh circles, it’s an institution. The service is excellent, the ambience is perfect and the cocktails, well… they’re amazing, of course! Anyway, the point being that for some, this bar is like their gin to their tonic and has been for years… and word is slowly getting out to those savvy gin drinkers.
I often think that this is similar to Origo. I’ve been in the industry for 17 years now (how did that happen?) and I know that there are some individuals who haven’t heard about Origo, and then there is a growing community that hold us very dear to their hearts - and this is why:
Put simply, the UK’s financial services landscape is large and complex and there are wild cats running in every direction. Margins are getting tighter and tighter, regulatory change is constant and so risk management is ever more present. As a result, the role that technology plays is getting bigger and bigger. On the face of it, our industry may look a bit disparate however, there are common problems experienced across the board. Examples include; getting pension valuations, logging into portals and platforms, setting up Auto Enrolment schemes and transferring pensions and other savings.
Technology is key to solving these common problems however, it needs to be entrusted to an eCommerce-dedicated industry body. As the industry’s eCommerce Standards and Services body, Origo has developed an instinctive ability to herd cats and set them off in one problem-solving direction. With over 25 years of experience in collaboration and internet technology, Origo is a well-established body that delivers and manages trusted industry solutions. For example, Origo’s Options Transfers service has consistently reduced pension transfers times from 51 working days to an average of 6 calendar days for over 70 leading brands – despite the total value of assets being transferred regularly going above £1bn every month. Pension transfers is a common, but a necessary process and, if handled manually, can be unnecessarily costly in all sorts of respects – but finding a solution that is tried, tested and well-established, needn’t be like hunting for a gem of a gin bar.
Email security – ‘the biggest challenge in online services in the years to come’
Posted by Victoria Green on Tuesday 23 December 2014 at 15:33
The recent hacking of Sony Pictures Entertainment and the hacking of South Korea’s nuclear plant operator are two very high profile examples of the new threat that industries and businesses are subject to in the Internet age.
The World Wide Web / Internet was just 25 years old in 2014 yet for most businesses it is vital to their operation. This is particularly so for the financial services world.
Think about everything you do online that just a few short years ago would have been paper based. Writing letters and sending documents is one basic task that has been changed forever. Around the world, customers and financial services providers exchange letters and documents containing data and information, often of a personal and confidential nature, probably every second of the day.
Whereas we used to trust the postal services to deliver those letters and documents safely and securely for us, nowadays more often than not we will send them via email. And we do that because it is fast, cheap and convenient; which is great for business.
The problem is that it is also great for hackers and criminals, who know full well that they can access people’s computers and emails so easily that unless protected the data we send is pretty much an open book.
One UK based ISP recently wrote to its customers admitting that security had “become a big issue in 2014” requiring it to introduce “triple-level virus engines” to its mail system “stopping thousands of infected files per day”. Security it went on to say is “something we see as the biggest challenge in online services in the years to come”.
There are now emails circulating that offer to hack any email system for as little as $350.
Criminals have quickly cottoned on to the opportunities that putting malware etc on our computers provides and now most companies have robust systems, procedures and processes in place to try to prevent malicious attacks from outside the company. The problem with emails, however, is that on their journey from sender to recipient they can sit on several servers, over which neither party has any control.
Worryingly, in a recent survey conducted for Origo across a range of financial services organisations, while 8 out of 10 large companies said they exchanged sensitive data on a daily basis, over one third (35%) stated that they never secure emails prior to sending internally or outside their business. This equates to some 44% of sensitive emails being sent unprotected and illustrates the vulnerability of email usage within financial services.
Sending an email that has no protection is like sending a postcard through the post – no company would contemplate sending confidential email in that way yet they do the digital equivalent every day. Any hacker who wants to read an unsecured email can do so with relative ease.
For financial services companies, the risk of customers’ personal details being accessed and leaked online or used for criminal purposes is a reputational hit they cannot afford to take. That’s not taking into account any penalties imposed for breaching laws and regulation. Such fines can be significant.
The best way to protect emails is to install an enterprise wide system that uses military strength encryption that ensures only the sender and the designated recipient can read the contents.
Unipass Securemail is powered by Trend Micro, one of the largest global Internet security companies, and has been developed to provide a turnkey solution for companies, delivering military-strength NIST (National Institute of Standards and Technology) encryption security.
Currently Unipass Securemail is trusted and used by over 65,000 registered users and its user base is growing rapidly. The service is flexible and scalable, meaning it can be used by organisations both large and small. It has already been adopted by some of the leading financial organisations in the UK financial market, including Royal London.