The letter of authority (LOA) process has been a long-standing source of frustration in financial services, and despite efforts to streamline it, it remains a major sticking point for advisers, providers, and clients alike. In a recent conversation on IFA Magazine’s weekly podcast, IFA Talk, Justine Pattullo, Chair of the FIX LoA Action Group (FLAG) and Nick Green, Strategy and Proposition Director at Criterion, shed light on why the LOA process is still causing headaches – and what’s being done to fix it.
“If you were to look up the letter of authority in a dictionary, there would just be the word ‘inconsistent,’” said Justine. “It’s inconsistent in every respect – the format of information, the type of information, the way information is requested, and the time it takes to receive responses. Each provider has their own rules, formats, and preferences, which makes it incredibly difficult to establish any sort of benchmark.”
For advisers, the LOA process can be a critical point in client servicing, yet it’s often under-resourced and neglected. “I’ve seen examples of clients walking away from the advice process because the LOA has taken too long to come through,” said Justine. “They were excited to get started but became so frustrated with delays that they just dropped out entirely.”
Nick echoed the sentiment, highlighting the impact of inconsistency across the industry. “That mess of inconsistency makes it really hard to know where to start when driving solutions,” he said. “For providers, it’s tough to know what good practice looks like because there’s no industry standard for LOA responses. Each response can be different – and that lack of uniformity creates a lot of unnecessary failure demand.”
Enter the LOA data checklist
To tackle the ongoing issues, Criterion has developed the LOA Data Checklist – a foundational step towards creating industry consensus around what a good LOA process should look like. “What we’re looking to do through the checklist is to drive industry discussion about acceptable levels of practice for data delivered through LOA responses,” said Nick. “If we can get everyone on the same page, we can reduce the back-and-forth and make sure that responses are right the first time.”
The checklist aims to set a benchmark for advisers, providers, and platforms, enabling them to align expectations and work more cohesively. “Providers don’t want to service failure demand – that’s a waste of time and resources,” Nick noted. “By setting a clear standard, we’re hoping to reduce that and, ultimately, improve the client experience.”
Raising awareness
Beyond data checklists, FLAG is also working to elevate the profile of the LOA process within firms. “There’s a real need to raise awareness of how critical the LOA is to client servicing,” said Justine. “It’s a precursor to transfers and yet isn’t included in any transfer timelines or service level agreements. It’s often treated like a forgotten corner of the office – but in reality, it’s a key touchpoint for clients.”
She added that the group is working to engage more stakeholders, particularly senior decision-makers within large providers and platforms. “If we can get the right people in the room to discuss these issues, we can start to allocate the resources needed to make meaningful improvements.”
Digital signatures and integration
Another area ripe for improvement is the acceptance of digital signatures. “You wouldn’t believe the amount of wet signatures still required in this industry,” Justine said. “Personally, I have a piece of paper from a platform just sitting on my desk waiting for a wet signature to be posted. If we could move towards digital signatures, it would save so much time and hassle for everyone.”
Nick also emphasised the importance of integrating systems to enable smoother data flow. “If we can encourage more firms to adopt the LOA Data Checklist as a digital standard, we can reduce manual processes and the errors that come with them.”
Consumer duty and regulatory attention
While there is currently no specific regulatory focus on the LOA process, both Justine and Nick believe that regulatory pressure could play a role in accelerating change. “The Pension Dashboard is coming, and it’s expected to increase LOA volumes eightfold,” Nick said. “If firms aren’t ready to handle that surge, it could create a real bottleneck.”
Consumer duty is another potential driver for change. “The FCA doesn’t differentiate between the sexy and unsexy parts of the customer journey – it’s all about delivering good outcomes,” Nick explained. “If firms don’t get their LOA processes in order, they could find themselves falling short of regulatory expectations.”
The impact on providers and advisers
The inefficiencies in the LOA process don’t just affect advisers and clients – they impact providers too. Nick highlighted the frustration on the provider side: “Providers are facing a surge in failure demand. They’re not just dealing with initial requests but also the follow-ups when responses aren’t accurate or complete. It’s a cycle of wasted time and effort, and it’s all due to the lack of standardisation.”
Justine added that FLAG is actively engaging with providers to bring them into the conversation. “We’re not just talking to advisers. We’re bringing providers to the table because they’re equally affected by these inefficiencies. If we can get more firms to recognise that the LOA process is a critical part of client servicing, we can start to see real change.”
A call for collaboration
The LOA process may seem like a small cog in the wider financial services machine, but as Justine and Nick made clear, it’s a crucial one. “It’s not down to one single organisation to fix the LOA process,” Justine said. “It’s going to take collaboration across the board – from advisers and providers to tech platforms and regulators.”
As the industry continues to wrestle with inconsistency, digital adoption, and regulatory pressures, the work of FLAG and initiatives like the LOA Data Checklist from Criterion, offer a glimpse of what a more streamlined, client-centric future could look like. And with the Pension Dashboard looming on the horizon, there’s never been a better time to focus on getting the LOA process right.
To listen to the full podcast episode featuring Justine and Nick, you can find it here: https://ifamagazine.com/podcast-121-the-friction-and-fixes-for-letters-of-authority-with-justine-patullo-from-flag-and-nick-green-from-criterion/
About Justine Pattullo
Justine is an independent marketing and communications consultant with over 20 years’ experience in pensions and wealth technology. As a fractional CMO, she supports a range of fintech clients — including Pension Lab, home to the UK’s leading digital LoA platform.
She chairs the Fix LoA Action Group (FLAG) and created the #LogYourLoAPain campaign with Pension Lab to drive industry-wide reform of the Letter of Authority (LoA) process. Known for delivering award-winning campaigns and uniting stakeholders to drive meaningful change, Justine previously led global marketing at Bravura and has worked with many of the UK’s leading platforms and fintechs.
About Nick Green
Nick has worked in and around data and process standards in the financial services industry for more than 20 years.
Over that time, he has delivered standards that continue to have a powerful, transformative effect on the industry. As a result, it is easier than ever for customers to stay in touch with their financial plans, and for advisers to access the information they need to deliver for consumers.
At Criterion, Nick works with organisations that rely on Criterion Standards, and with wider stakeholders in the mission-critical processes that they support, to identify new areas that could benefit from the power of standardisation, build consensus towards adopting market-improving practices, and ensure that existing standards remain up-to-date and relevant to the industry’s ever-evolving needs.
