On the go: A new accreditation scheme has been launched to tackle the amount of time it takes to switch savings, investments and pensions between providers.
The industry has often faced criticism for taking too much time to switch savings from one provider to another, with clients often having to wait weeks or months for transfers to complete.
In an attempt to speed up switches, the Star initiative has now decided to award the best-performing providers.
Launched in 2019, Star is a partnership between Criterion and Tex and aims to promote good practice among providers when moving clients’ cash and assets from one company to another.
Star steering group chair Andrew Marker said: “It has been testing to reach a consensus and make progress, and if it was easy it would have been tackled years ago.
“I am delighted that after an intense and sustained period of work, the industry has galvanised to drive forward a scheme whose goal is to improve customer outcomes.”
He added: “Star measures the performance of companies when executing transfers, which provides regulators, customers and their financial advisers with clear evidence of how firms are behaving and shows a clear commitment to focus on improving their performance.
“This creates a competitive advantage for organisations involved in Star, who are leading and driving industry change when it comes to switching.”
To date 76 companies have signed up to Star, and of these 18 have been accredited in three levels – gold, silver and bronze – in a process that is designed to measure and accredit transfer performance across the industry.
The companies were awarded in 2022 for submitting at least nine consecutive months’ transfer data.
The awards are based on certain factors, one being that one area of good performance cannot outweigh the poor performance in another area.
They are also measured on a range of key performance indicators not only on the overall transfer time, as there are also “a lot of mitigating factors to consider when reviewing the overall performance of an organisation”.
Star concluded that the best way to judge an organisation fairly was to set up a points-based metric system, with a company being scored on several key areas such as the average number of days to transfer a customer’s assets, how they communicate with their customers on that journey, and what percentage of their electronic transfers were reported for the accreditation.
The average ceding times for bronze, silver and gold-accredited transfers for occupational pensions was 21.9 days.
Rob Yuille, head of long-term savings policy at the Association of British Insurers, noted that these switches between providers are a key part of good customer service and healthy competition.
He said: “People will only transfer pensions and investments a few times in their lives, so it is really important to get it right for each customer’s experience, for each firm’s reputation and that of the whole industry.
“Smoother transfers can only be achieved through collaboration, so Star’s accreditation framework, spanning different types of pensions and investments, is a big step forwards and builds on the improvements to transfers delivered by industry over the years.
“To continue to improve we encourage more firms to participate in Star, to measure performance transparently based on evidence of outcomes and a common understanding of good practice across the whole industry.”
This article originally appeared on FTAdviser.com
