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Leading investment and pension bodies publish consultation on proposals to improve pension and investment transfers

Eight of the leading investment and pension trade associations have joined forces to investigate ways to improve the process of transferring pension and investment assets. Following a review process, a consultation paper has been published today and is seeking input from all stakeholders.

The proposals relate to both transfers and re-registrations of retail financial products, covering a broad range of tax wrappers and those asset types which are held in these wrappers.

The review is seeking feedback on these proposals and other ways to drive improvement by 31 January 2017, with a final set of recommendations due to be published in Spring 2017. This work has been undertaken by the industry, but in consultation with the FCA, DWP and tPR.

Summary of the five proposals to improve the transfers and re-registration process:

1. The creation of clear service expectations for transfers and re-registrations, including a 48 hour standard for completing each step in the process.

2. The collection of high level management information and a common reporting methodology for all transfers and re-registration instructions.

3. The creation of a forum to identify, prioritise and implement solutions that resolve unnecessary barriers to transfer and re-registration processes. 

4. The development of common industry standards and good practice guidelines for the retail investment and pensions industry. 

5. The establishment of an independent governance and oversight body to oversee the implementation of the final proposals.

The review process is comprised of members and representatives of the following industry associations:

  • The Association of British Insurers (ABI)
  • The Association of Member Directed Pension Schemes (AMPS)
  • The Association of Professional Financial Advisers (APFA)
  • The British Bankers’ Association (BBA)
  • The Investment Association (IA)
  • The Tax Incentivised Savings Association (TISA)
  • The UK Platform Group (UKPG)
  • The Wealth Management Association (WMA)

The review has undertaken detailed analysis of the current processes, sought views from the industry, and conducted primary research to understand the views of consumers. Analysis highlighted that while there was a generally high level of consumer satisfaction with the majority of transfer and re-registration processes, outcomes can vary, sometimes significantly, by provider, by wrapper and by asset type. It also identified scope to improve firms’ accountability for delivering good customer outcomes within some transfer and re-registration processes. 

With recent developments such as auto-enrolment increasing the number of individuals with pension and investment accounts, more options being available to customers as a result of the freedom and choice reforms, and the development of the Pensions Dashboard, this is likely to become an increasingly important issue for consumers.

Chair of the Group, Ed Dymott, Head of Business Development at Fidelity International, said: “Enabling consumers to shop around and move between providers is fundamental to any competitive market. For pensions and investments, this means customers need to be able to consolidate or move their assets between different providers efficiently and with clarity at all stages. 

This review recognises that this is a highly complex area, with a broad range of different products and participants involved in the transfer process. There is some good market practice already in existence that can be built on, however we also recognise there are parts of the market where improvements can be made. We believe the five proposals under consultation can provide the framework for improving client outcomes for transfers.”

Yvonne Braun, ABI Director of Policy, Long Term Savings and Protection, said: “This initiative aims to speed up the transfer and re-registration process and is a positive example of the industry collaborating to make things better for consumers. We’re pleased to be co-ordinating this work and are now consulting with the wider industry and all interested stakeholders to ensure our proposed next steps are practical.”

For further details on the proposals click here.

  - Ends –

Notes for Editors

1.    This press release is issued by the ABI on behalf of the review and all of the associated industry associations

2.    The scope of the Review included all types of tax wrappers and all types of assets that can be held within these wrappers. The Review covered transfers (where a transfer from one provider to another is done by selling assets and transferring cash) and re-registrations (where the registered ownership of the asset is changed and the asset is moved in specie). The types of asset classes held range significantly in structure from simple and widely available share classes in collective investments to physical assets held within SIPP accounts such as commercial property.

3.    Due to the nature of processes and sub processes required to be undertaken to transfer the more complex asset types, it may not be possible to include these more complex asset types within the initial proposal to set clear service standards. Transfers of bank accounts or Cash ISAs are also not within the scope of the review, as these transfers have already been subject to a recent review and improvement of market practice.

4.    The proposals in the paper have been discussed with the Financial Conduct Authority, the Pensions Regulator, and the Department for Work and Pensions.

5.    Enquiries to:
Malcolm Tarling        020 7216 7410    Mobile: 07776 147 667
Lauren Gow            020 7216 7327    Mobile: 07889 641702

Last updated 21/12/2016