Origo Blog

The introduction of pension auto enrolment has brought to the fore the issues around the ability to transfer small pension pots between provider companies when people change their employment.

Labour mobility is now an essential part of the UK economy and anecdotal evidence suggests that people may not only change job on a more regular basis than was perhaps the case 10-20 years ago but could change career 2-3 times in their working lives.

Accordingly, the ability of people to carry pension arrangements with them when they change employer rather than freeze the pension, as often happened in the past, with all the additional administration and cost involved, has become a more pressing issue.

Origo responded to the issue by launching the Options Transfers service in 2008. Since launch to November 2012 Options has transferred over £26bn in pension money between providers for the end customer. The figures below show the percentage of pension-to-pension transfers that fall within the small pot category.

The pension to annuity transfers, i.e. those using the cash from their pension to purchase a lifetime income reveal a similar picture.

Significantly, Options has experienced a 42% rise in transfers in the past year. This reflects both the growth in the number of major companies using the service and the greater use of Optionsby all users as the market has opened up more widely to transfer of business, resulting in this substantial organic growth.

The industry needs to have confidence in its technology services that ultimately affect the service provided to the end customer and the fact that Options Transfers handled that substantial 42% increase in volumes without impact to the end customer is a clear demonstration of just how robust and scalable it is as a system.

Now, with the facility to re-register assets, an issue that we expect to take on increased importance in 2013, Options is the only complete transfers service in the market.

Find out more about Options Transfers today >

Justine McCoy

As an organisation that quite literally joins the electronic dots between various parts of the industry, in particular between providers, platforms and financial adviser firms, Origo is fortunate to be in a position to foresee and so work to provide solutions to common, key issues in the market.

One area, that in 2012 we raised as a pressing issue, was the re-registration of assets between SIPP platforms. Our White Paper issued in October 2012, highlighted just how far away the industry was from being able to effect efficient re-registration.

Of course, the SIPP market is far more complicated than many others because of the wide range of assets that can be held within the wrappers, coupled with the variations in the liquidity of those assets, and this creates obvious problems for providers when they receive a request for a transfer.

However, this is an area that can be dramatically improved by the implementation of efficient technology. We have worked to build an addition to our well-established ‘plug and play’ solution that platforms and providers can adopt both quickly and easily to demonstrably reduce transfer times for a range of assets including; SIPPs, ISAs, GIAs and more. This service enables firms to get on with running the other parts of their business, providing peace of mind that this particular RDR and TCF issue has been ticked off.

There are three drivers that are set to put this area of the market more intensely under the spotlight in 2013.

1. FSA Intentions: The FSA’s intention to focus on ensuring a better outcome for consumers needing to transfer cash and assets between providers.
2. Market Developments & Competition: There is potential growth in the retirement market itself (Auto Enrolment etc). We’re also experiencing increasing competition between platforms and providers, and a company’s standard of service is a core differentiator.
3. The RDR: Lastly, we are due to see an increase in asset transfers as the financial advice market adjusts to the new RDR landscape. There has already been a flurry of merger and acquisition activity in the adviser market since the New Year that, inevitably, will demand transfers of assets between SIPPs and platforms as firms shift clients to their preferred platforms /providers.

So it is no surprise that leading SIPP providers and platforms are already moving to employ automated asset transfer and re-registration capabilities, not least as a means to create clear blue water between themselves and their rivals.

Before Christmas we announced that AJ Bell was one of the many major platforms to join Origo’s Options Transfers Re-registration service, and hot on their heels is Curtis Banks - another major SIPP provider wanting to benefit from an industry tried and trusted service.

It’s clear to see that the need for an experienced, low-risk, wide coverage transfers solution is essential to help our industry join the dots.

If you are a platform or SIPP provider and would like to know more about Origo’s Options Transfers service, please take a look at the re-registration section of our website or call us on 0131 451 5181.

Justine McCoy

As we welcome a new year and begin to get settled in and get back to ‘normal’ we all know that the times that lie ahead will be anything but ‘normal’ especially as the RDR hangovers start to settle in. Platforum’s, Holly Mackay, stated that ”...as we head into 2013, it feels as though no-one is actually quite sure what is going to happen!” and for many that will be the case. With some restructuring and the FCA taking the reins - 2013 will bring significant challenges for a range companies and for some there will be some catching up to do in the first half of the year.

The RDR demanded attention from various departments and resources within organisations in the run-up to 2013. So last year, there was an element of fumbling in the dark when it came to addressing certain RDR issues such as Asset Re-registration - where the FSA mandated that it is to happen “in a timely manner”. As our pension and investment industry continues to grow, the issue of being able to efficiently re-register assets also gets bigger. And as the light shining on our industry becomes ever brighter customers, advisers, regulators and others expect a level of service which can only be managed by effective management of assets including the ability to transfer efficiently.

As the industry’s eCommerce body, we work with the industry to bring solutions that not only solve regulatory commitments, but which also ensure trading relationships between platforms, providers and advisers are more efficient. Our range of services includes Options Transfers - a tried and trusted industry solution for the efficient transfer of pensions. As an award-winning transfers service, we also developed the addition of Options Re-registration which enables re-registration of assets including SIPPs, ISAs, GIAs and more. But our commitment to assisting you with RDR doesn’t just end here.

Our longest standing service – Origo Standards - provides the backbone for industry secure messaging, enabling information to move smoothly from one party to another in a compliant and efficient manner. Established in 1989, Origo Standards have continued to be developed and adapted as the industry evolves. Most recently we launched our Remuneration Statement Standard. Designed to specifically address the changed remuneration structure brought about by the RDR, it enables advisers to match each and every individual payment.

Working with us could be just what your RDR hangover needs.

Think of us as your RDR Alka Seltzer!

Justine McCoy

Now in its third year, the Platforum Women in Finance event is attracting more and more ladies from our industry to meet, network and learn from each other.

There are few events where whether you have a (working) microphone or not your voice can be heard. With a great line up of speakers – all of whom did extremely well – there was plenty to discuss and debate during the afternoon.

As one of the speakers, I was invited to discuss what the industry can expect in 2013 and with limited time, I chose to focus on two topics that are close to my heart:

1. Systems integrations

2. Transfers

Systems Integrations

The RDR will see increasing pressure on advisers to better demonstrate the value they provide to their clients. This pressure, in turn, will be applied back up the Value Chain as advisers, like their clients, are becoming more and more demanding of their chosen suppliers.

So how can we derive more value? Essentially, cost reduction and increased opportunities for business – and if our business is money, then how we deal with each other, our “currency” if you like, is data. So, when we set-up our trading links, our “data exchanges”, we want them to be:

• Robust;

• Reliable;

• Standard;

• Compliant;

• Auditable;

• Easily maintained;

• Secure;

• Efficient and

• Cost effective.

Origo recognises that no party in the value chain is an island and our eCommerce standards library dedicated purely to Platforms will help drive more value to the adviser and ultimately the end client.

Transfers

There are a range of drivers behind the increasing trend in transfer numbers. Life events, improved market propositions, regulation and consumer savviness –so we’re seeing demand in re-registration transfers increasing too.

Re-registration is increasingly coming under the spotlight. The FSA has mandated that transfers must be conducted in a ‘timely manner’ and as part of an adviser’s platform due diligence, the ease of moving assets on and off platforms is a critical consideration.

So, what is the industry doing to address the transfers and in particular in-specie transfers or re-registration?

Since launch four years ago, Origo’s Options Transfers service has seen ¾ of a million transfers go through the system. More recently, we’re encountering on average 40k transfers initiated every month and we’ve continued to reduce transfer times by 80%.

We’ve now also added re-registration capability which makes Options the only complete transfer service in our industry.

Based on research Origo commissioned in August, we’re hosting a free interactive webinar to explore and explain the complexities of re-registration transfers on Wednesday 28/11 at 10am.

Overall, a great day, great conversations and the wine free flowing! Looking forward to Chicks 4! 

Our thanks to everyone who joined our webinar this morning.

We believe there are crucial issues around the transfers of SIPPs that, in amongst all the noise around RDR, the industry has yet to get to grips with, notably the re-registration of SIPPs, volumes of which are likely to grow over the next few years. 

What has been lost in that noise is the fact that just as platforms have been charged by the FSA to have reasonable processes in place to effect re-registration in a timely manner, this also applies to SIPP platforms. 

The crux of the matter is that currently the SIPP market is complex with no single business model that would help with standardising market practices and a range of assets to transfer, from mutual funds to more esoteric investments such as commercial property. At the same time pensions are coming increasingly under the spotlight of both the Government and the Regulator.

Our research into the SIPP transfer process has shown that currently it is largely manual, there are differing interpretations of who does what and in what order, there is no consistent format for data nor in whether a wet signature is required, and as might be expected, there are variable response times, not helped by an inadequate resourcing of transfer out teams. 

This sees the industry facing a range of issues including increased administrative costs, slow transfers exposing the end consumer to market risk, poor customer service, potential for detrimental outcomes for consumers, and in consequence, the threat of increased regulatory scrutiny and intervention if the FSA/FCA believes the industry is not responding to the significant improvements it wants to see in re-registration. 

Yet these improvements can be quickly and easily enabled through the automation and orchestration of SIPP transfers. The benefits would be almost immediate: we would see less paper, less keying, fewer errors and so less progress checking; faster transfers with less reworking because the data is correct and standardised to ease processing; reduction of risk through the ability to facilitate internal audit controls; in effect a faster, better service, which should generate fewer complaints and in turn fewer potential claims for compensation. 

Importantly, these benefits would lead to greater confidence in the transfer process and the ability to process greater business volumes, as well as relieve potential regulatory pressure on the SIPP market.

At Origo we have been developing our Options Transfers service to incorporate SIPP (and ISAs and GIAs) re-registration. Our aim has been to provide a consistent transfers service – whether for cash or re-registration of assets – and to ensure the exchange of a broader set of data such as the wrapper information incumbent of SIPPs, making Options the only complete transfers service in the market. 

Our re-registration service provides a flexible off-the-shelf solution to providers’ and platforms’ asset transfer issues. For the SIPP market in particular, it ensures:

• a standard way of working with industry peers


• established roles and an agreed sequence of events


• common declaration on application forms, which does away,for example, with discharge forms (and for annuities lifetime allowance forms)


• paperwork is removed from the process


• agreedtimeliness standards, which can be fixed for different asset types


• monitoring against agreements and standards,with published results


• tracking of individual cases, with a specified contact allocated to ensure a well-orchestrated transfer regardless of the complexity of the SIPP involved


• and data interchange and messaging is electronic, providing the speed and the auditing benefits one would expect of an eCommerce service.  

Importantly, this is a stand alone transfer hub that is web-based and because it is an off-the-shelf solution it does not place a drain on providers’ internal IT resource - users can be up and running with it very quickly indeed, which means they can meet their RDR re-reg commitments. 

Find out more about Options Re-registration >

Or call 0131 451 5181 to find out more.

Justine McCoy

We are calling on platforms, SIPP providers, life companies, financial advisers and any other interested parties to get involved in Origo’s industry webinar on the re-registration issues facing the SIPP market.

The webinar will be held on Thursday 8 November at 10.00am and you can register to attend.

The webinar aims to generate active dialogue amoungst industry participants and start the process towards advancing automated and orchestrated SIPP re-registration, to enable cost savings and improve the experience for consumers.

As our recently published White Paper has revealed, there are some key issues that the industry has to address if SIPP transfers are to be carried out in the ‘timely manner’ that the FSA has stipulated for providers and platforms in order to meet their RDR requirements.

There are clear operational difficulties as well as regulatory pressures for the SIPP market if action is not taken to address these issues.

Research for the White Paper was conducted with 15 providers and platforms in the SIPP market and examined the current processes, where those processes were less than efficient and how and where they could be improved.

Our research demonstrated that there are core questions the industry needs to tackle straight away. These include:

• who does the transfers work?

• who are the other parties involved in that transfer?

• who carries the costs and risks involved in transfers currently?

• who will benefit from an improvement in the efficiency of transfers?

Justine McCoy

Two months today RDR will be a reality. By then the FSA expects all platforms and providers will have in place a re-registration process that can affect asset transfers on and off platforms in a “timely manner”. 

From a client-centric perspective, should a client wish to move their assets from one provider to another, then in our highly technology-driven world they will expect that this will be done quickly, efficiently and with the minimum of fuss. 

Currently, there are many barriers to achieving that acceptable level of service in the SIPPs market, in part down to the complexity of the assets that may be held in the SIPP wrapper and partly because the industry has to work together to ensure various systems and processes are aligned.

Those barriers are causing delays to the consumer and the simple fact for financial advisers is that delays in effecting a transfer in a fee-based, value-for-money RDR world could have a detrimental effect on the adviser-client relationship. 

Used exclusively by providers and platforms, Origo’s Options Transfers service has determined a speedy, efficient and acceptable service level in transfers of personal pensions. Our Options Re-registration service is now doing the same for the SIPP market.

But what does a good transfers service look like? Based on our industry role, research and transfers experience, we have collated 20-point Check List that highlights the key features industry practitioners should be looking for when they are conducting due diligence with the aim of selecting the right solution for their businesses.

We are also hosting an interactive industry webinar on the issues the industry must address in the transfer of SIPP assets between platforms. This will be held on 8th November at 10.00am. 

The 20-point check list to what a good re-registration service looks likes - View the check list >

The Origo 'Transfers of SIPPs' White Paper (Download it here) published on 24th October revealed the issues affecting the efficient, cost-effective transfer of assets in the SIPP market and how the process can be improved to benefit the end consumer as well as financial advisers, platforms and providers.

The SIPP market has grown rapidly and can be very complex in its processes and assets held. Over time this has resulted in some less than efficient and time-consuming practices - including the manual keying of data; double-keying to try to eliminate errors; inconsistent descriptions of funds or nominee names; and resultant varying response times and delays. 

The obvious means to speed up the process for the end consumer and reduce time and cost inefficiencies for the industry is to create an electronic delivery solution, thereby taking much of the labour-intensive, potential error-creating elements out of the picture. 

Our trusted Options Transfers service (Find out more about Options Transfers), launched in 2008, has substantially reduced cash transfer times (for pensions to annuity and pension to pension) by 80% - and that reduction includes the time taken up by the banking system’s BACCS money transfer process. 

Since then, we have developed Options’ capability to include re-registration transfers. Our Options Re-registration service (Find out more about Options re-registration) enables efficient in-specie transfers for SIPPs, ISAs, GIAs and more. 

More importantly, Options Re-registration is the only service with the ability to transfer the full wrapper information essential for SIPP transfers.

Origo is a not-for-profit organisation committed to tackling eCommerce issues and to moving the industry forward. In developing Options Re-registration we want to see the transfers of assets in SIPPS benefit from the efficiencies that Options Transfers has already delivered to the personal pensions market.

For this change to happen there needs to be an active dialogue between industry participants. To further encourage that process we’re hosting an industry webinar at 10am on Thursday 8 November. Please join us.

To read our White Paper – request your copy >

Justine McCoy

Yesterday I had the pleasure of attending the annual Platforum conference or #platforum6 to those in Twitterverse.

From my attendance in previous years, I have developed an almost Pavlov behaviour to this annual event – knowing full well that it will be spilling over with juicy insights and entertaining debates. Harry Hill's “there’s only one way to settle this - fight!" springs to mind when I think of yesterday’s session.

We covered a number of interesting topics from various perspectives, and there were a couple of points raised deserving of further exploration: 

1. Convergence of SIPP providers and platforms

2. TCF

1. SIPP providers and platforms, what’s the difference? Not much really. They both have to comply with the FSA and when it comes to the topic of re-registration and ensuring 'timely transfers' neither are exempt. More and more platforms are offering SIPPs and this natural development means that for platforms, re-reg isn’t just simply about moving ISAs and GIAs, but for SIPPs the entire wrapper information has to be transferred too. Origo’s Options is the only complete transfers service that as part of its cash, ISAs, GIAs (and the rest!) transfers facility, it is also able to make the required SIPP wrapper transfer possible. 

Our White Paper, published only this week, explores the complexities of SIPP transfers and how the process can be improved, providing operational efficiencies and improved customer outcomes.

2. TCF, what is that again? With plenty talk of pricing and business models it was timely that towards the end of the day that Rory Percival of the FSA reminded us of TCF. The over-riding principle to which all principles look to, TCF stretches the entire length of the value chain and robust due diligence when selecting a platform demonstrates commitment to TCF. Once the platform selection job is complete however, it’s then the process of ensuring that the platform continues to meet the needs of your clients. And if it no longer does, how do you transfer them? Ensuring that the platform has an efficient re-registration system/process in place is a key due diligence requirement. Our 20 point check list of what a good re-reg service looks like can help platforms, SIPP providers and advisers with re-reg due diligence.

Well done to Platforum on another super conference. I’m looking forward to the Chicks Event next month. I might need to get myself a pair of red shoes now…

Justine McCoy

There is a strong possibility that the millionth SIPP will be written before the end of this year*  - this brings home just how much the SIPP business is thriving. The popularity and diversity of SIPPs has in turn brought about the birth of a range of differing business models - from the simple to the bespoke, all of which are supported by numerous and disparate systems and processes. Add to this, the complexities of a changing market, where transfers, in particular in-specie re-registration transfers, are increasing year after year.

The benefits that re-registration offers to consumers and the potential complexities the process can encounter, it makes sense that the FSA has called for ‘timely transfers’ as part of the RDR. There is a clear need for the industry to take action and at Origo, we recognise this. By commissioning independent research across 15 different SIPP platforms and providers, it was confirmed that the typical transfer process for SIPPs is often laborious, time-consuming, inconsistent, costly and lacks monitoring and service level agreements (SLAs).

As well as conducting research and facilitating industry workshops, we’re also working with trade bodies such as AMPS (the main trade body overseeing self-invested pensions) to identify where the industry can make improvements. 

Our Options Re-registration service enables efficient in-specie transfers for SIPPs, ISAs, GIAs and more. Unique to our service, is the ability to deliver a broader set of data needed for the transfer of the full wrapper information essential for SIPP transfers.

As part of our commitment to the industry to improve transfer times and processes, we have also published a 'Transfers of SIPPs' White Paper. The paper tackles the key and complex issues surrounding re-registration and provides practical guidance on what can be done now to improve the process. 

We’re also hosting a free interactive Webinar on 8th November to provide further insight into how automation and orchestration of transfers is available now, ahead of the RDR deadline.

To read our White Paper – request your copy >

*Source: John Moret, MoreToSIPPs