Customer Detriment and Foreseeable Harm can lie as much in providers’ back-office standards of service and the impact they may have on outcomes, as they can in products, says Anthony Rafferty, CEO, Origo.
In the following analysis, featured as part of IFA Magazine’s special focus to mark the first anniversary of Consumer Duty tomorrow, Anthony uses the example of pension transfers to highlight some of the challenges for advisers when making ongoing due diligence decisions about products for their clients.
As we mark the first anniversary of the implementation of Consumer Duty tomorrow, it is clear that one of the consequences of the new rules, is that companies can find themselves dependent on the operations of other companies, with efficiencies of processes outside of their control.
Pensions transfers are a case in point. The majority of the market is striving to deliver fast pension transfers – our Origo Transfer Index which tracks the ceding times of 30 leading companies shows that average transfers times have come down by 18.3% over the past eighteen months from 12 calendar days in January 2023 to 9.8 calendar days at the end of June 2024.* But it is the outliers in the market, the companies still processing transfers manually, and that are slow to respond to transfer requests, who are causing issues for advisers trying to do the best for their clients and deliver positive outcomes.
The lang cat’s Mike Barrett recently wrote about this in the firm’s weekly email**. He said: “Pension trustees and scheme administrators are where the fun really starts. These firms are not impacted by Consumer Duty, yet the people they are attempting to serve are. I’ve seen several examples of advisers identifying clear Customer Detriment and Foreseeable Harms in the direction of these providers, with their pleas for just a bare minimum of service and contact falling on deaf ears. Again, this needs to improve.”
We couldn’t agree more.
We have to look at the eco-system as a whole to see where the pain points are and then strive to fix them. Customer Detriment and Foreseeable Harm can lie as much in standards of service and the impact they may have on outcomes, as they can in products.
There is a commercial element to this also. Advice firms taking on new clients are seeing their client service and reputations affected by the long delays forced on them by providers.
The question is, as an adviser, where are you most likely to put future business if you know you will get 21st century service from one provider who quickly has your client up and running in your business, or one where you may have to wait weeks for an answer to a simple process? Particularly if the latter could impact your relationship with your own client and put you at odds with the Consumer Duty rules.
* https://origo.com/assets/components/hero/Origo-Transfer-Index-1-July-2023-to-30-June-2024.pdf
** https://thelangcat.co.uk/the-top-class-wednesday-update-can-remember-what-he-was-doing-in-2013/
