“Why should they be forced to make last minute decisions in the final week of their CETV because their scheme took a month to add an LOA and/or provide any necessary or missing information?” he said.
“These service levels are simply not acceptable in my opinion in 2023, when technology and systems have moved on dramatically.”
He explained that some schemes still provide “huge friction” to a transfer advice process by requesting all paperwork either signed originally or even worse signed and posted to the scheme in original format.
“Most clients no longer have printers at home, and paperwork remains a stress that they need to administer and go to their local post office,” he said.
“Some busier clients with a professional career have not been to a post office in many years and find this extremely frustrating.”
He added: “We have to ask, when the FCA, HMRC and UK Courts all typically accept electronic signatures such as DocuSign, why do these ceding schemes deny clients and make it so tough?
“Based on what regulation are electronic signatures not a valid and legally binding document. Unfortunately, at best, I believe the answer is sheer incompetence and an unwillingness from schemes to update.
“At worst, a pre-mediated complicated system designed to slow transfers down, or put clients off and thus maintain AUM.”
‘Sludging is real’
Last week, FTAdviser’s editor Simoney Kyriakou wrote a story focusing on 'sludging' - the practice by which companies make it hard for ordinary people (and even advisers) to switch to a new provider or product.
The Financial Conduct Authority has been keeping an eye on this for many years and it is an area of focus for the regulator when it comes to the incoming consumer duty regulations.
The regulator has already said it is publishing research on sludge practices and is considering "potential approaches that we may use in our supervisory work to investigate them".
Commenting on the story, one adviser commented stating that training at many companies who promote engagement “is woeful with inaccurate or wrong documentation being issued”.
Murray explained that as a result of these time consuming issues, Cameron James have had to create an entire transfers department at his firm with five full time salaried staff whose “single daily task is calling the schemes and sitting on hold for up to 60 minutes at a time to 'chase' pension information required for a client's report”.
“It was simply no longer feasible for our financial advisers to continue these administration tasks as it took them 2-3 hours per day, when they should be focused on providing advice to clients.”
