OK, you know the drill. We’re getting close to event day – that’s HomeGame 4 on 3 October – and I have some tickets left for advisers and you’re going to have to put up with increasingly peevish marketing at the top of Updates until they’re gone. So if you work in an adviser firm and can get to Embra for the afternoon and evening of 3 October, do the decent thing and book your place so everyone can be spared this. Oh, and if you can’t then sign up for a streaming spot instead (everyone’s welcome no matter who you are). We’ve got a bunch of very cool advisers talking, some interesting lang cat stats, some industry heavy hitters, Rory Bremner doing the close, seriously good catering and a beautiful venue. And it’s free to you. Both in-person and streaming tickets are here.
OK, back to normal stuff. I had some fun on Monday doing a webinar on the impact of poor service in the area of transfers with Martin from Parmenion and Marina from Herbert & Webster. You can watch that here and despite me doing my best to lower the tone Marina and Martin are both excellent.
A few things stuck with me, and I want to use them just to illustrate a couple of wider points. The first is that while it is undoubtedly true that some transfers are now as slick as goose…er, fat, this is far from universal. The industry – as distinct from the profession – is quick to say “didn’t we do well” for the good, but the bad sits inside some version of “we know we still have work to do” which I’m not sure cuts it in 2024.
Marina told us her team wastes up to a third of its time dealing with either delays or errors in instructions which have already been placed for one thing or another. One IFA in the chat said he had a member of staff dedicated to what I can only describe as something that rhymes with “funducking” these sorts of issues. Wouldn’t be my choice for a job, but I guess it beats being a traffic warden?
I am not the first nor the last to point out that this is nuts. It’s a symptom of bad process design and no consequences. The bad design – stupid forms, ass-covering, ridiculous circular processes – is caused not by evilness and wickedness, but by people building stuff with exactly no idea of what happens outside the building. I refuse to believe – outside of consulting actuaries and zombie insurers – that some of the nonsense we see and which Marina was too nice to call out by name was designed deliberately to provoke, delay, obfuscate and offend. More likely it was done by someone who’d never so much as set foot in an IFA office and who had never met a client. You can fix that. What you can’t fix is the no consequences part, and it’s that which really boils the micturate of firms, who end up carrying the can because they’re closest to the client.
That’s a moan, not a fix. So we need to get behind it and see what’s going on. Martin had some good stuff here, and again a couple of bits stayed with me. The first is that transfers in specie are…not complex exactly, but they have a lot of attendees, from custodians to transfer agents to fund managers and so on. Hold 20 funds in a portfolio and you’ll end up with dozens of parties involved, few of whom are particularly interested in spending gajillions to sort this issue until every and I do mean every other part of the chain has done their bit. You can only go at the pace of the slowest.
So OK. Let’s shine a light into this. Let’s identify every single party that can slow or speed a transfer down or up in a particular case. Let’s give the adviser line of sight about who’s done their bit and who’s sitting with their thumb up their butt and an “Am I Cute Enough To Kiss?” hat on. Somewhere we know who is involved in each exercise and we know when they’ve done their bit. I’m talking about exhaustive detail here. It would help everyone understand what’s involved and would make it very clear who’s owed a visit from the Evil Slow Transfer Clown.
There are other things that could easily happen. I’ve written here before about providers who sign up for all the electronic stuff for transfers in but are all tumbleweed and “oh it’s complicated” for the transfer out part. I don’t think any of the gateway providers should accept any provider who doesn’t do both. And we should certainly name and shame those who could find the money for one half and not the other. It won’t fix everything, but it will help in lots of cases and that’s worthwhile.
Martin also had a good point to make about what we measure. Each provider, including those who are signed up to industry initiatives, tracks their bit and if they do well they get a gold star and a free drink of their choice (softs, draught beers, house wine, standard spirit plus mixer, no premium spirits) at the club. But these initiatives, good though they are, don’t measure the client experience. The only people doing that are the client themselves and Marina and her peers. Yes, I know we are excited about some transfers happening end to end in a few days and the people doing those have watched them. But that’s not an adequate reflection of real life. For a start, we should start the clock running when the LoA lands at the ceding provider, and we all know how variable that can be.
Under Consumer Duty we need to think about outcomes, and based on what I heard I don’t think we have a very good handle on them.
I’ve been knocking around this part of our industry for over 25 years now, and the issues are always the same: complexity, transparency, lack of consequences for not doing well. 91% of advisers we polled said they thought transfers should be regulated like the direct debit guarantee scheme. Providers aren’t so keen – but any time you hear advisers call for more regulation, you know something’s up.
A final parting shot – every platform C-suite exec should be forced to go and work for a week on the transfer out and LoA desks in their businesses every year. Back to the floor isn’t new, but my goodness it’s needed here.
And your music choice this week is something I think most of you won’t know, and it’s not br00tal metal for once. I’m off to see Arab Strap tonight, and the support is a great Scottish band called Broken Chanter. Here’s one of theirs; please enjoy of Should We Be Dancing?
