Completing pension transfers in less than a day
In sharp contrast to the examples frequently cited in the financial services news, transfers can be completed in less than a day.
In this blog article, Rich Mayor from Fundscape explains his experience of transferring an account between platforms. He moved a Stocks and Shares ISA, together with an in-specie transfer of the three funds held in the ISA, from Fidelity to Hargreaves Lansdown. The transfer was successfully performed and were made available at the end of the day after he submitted his command via the Hargreaves Lansdown portal in the morning.
When compared to the examples of transfers requiring weeks or even months that are frequently reported in the financial services news, the completion of a transfer in less than a day stands in stark contrast. While there is no doubt that the industry has a long way to go in terms of transfers, it is important to look at the factors that contribute to good customer experience in order to figure out how to best handle poor customer service. Namely, why can't everyone conduct ISA and pension transfers in a day?
Open transfers framework
The speed of the transfer is impressive, but it’s the scope of the industry collaboration involved in this transfer is what makes it so extraordinary.
The transfer involved four companies‒Hargreaves Lansdown, Fidelity and two fund managers (responsible for re-registering the assets). These businesses leveraged the interconnected systems of two separate technology suppliers, Calastone and Altus (Now Equisoft.) These systems communicate with one another using open standards established by the UK Funds Market Practice Group (UKFMPG), while the TISA Exchange regulates the legal protection for providers carrying out the transfer (TeX).
The development of this "open transfers" framework has involved more than a hundred financial services companies in the UK. Every organisation has an equal voice in decision-making, and the majority of the work is done for free. Although cooperation is frequently stressed as being important, it is uncommon to witness cooperation of this magnitude or with such a direct influence on end-user services.
However, there are still some issues to be solved. Not all ISA and pension transfer services can yet function together in conjunction with the open transfers framework; some of them continue to operate independently. Some providers haven't joined yet, therefore they can only answer transfer requests in writing. As a result, the sector continues to deal with excessive expenses and a high percentage of transactions that are still completed manually.
Wrap up
However, we should at least acknowledge the positive advancements we have seen. I understand that the headline "Customer obtains fantastic service because providers were able to work together successfully" is unlikely to make the front-page news, but it may provide a counterpoint to the regular bad news diet of mis-selling, exorbitant prices, and client complaints.
