STAR (speedier transfers and re-registrations), is an award scheme, launched as a long-term solution to improve customer experience of transferring savings, pensions and investments between companies by setting and measuring against a good practice framework.
STAR participants should be applauded for their efforts to improve transfer efficiencies. By taking part in the STAR initiative, firms are showcasing their eagerness to deliver good outcomes for their customers and taking positive steps in reducing delays.
STAR has now been accrediting for two years and last month we wrote to the Financial Conduct Authority (FCA) to provide them with an update on STAR’s progress, and to highlight the challenges of recruiting new firms to join the initiative. The FCA reiterated its full support of STAR and has shared its plans to link STAR with the Consumer Duty rules, which were introduced in July 2023.
Some of the key points in its communication:
“We remain fully supportive of the STAR initiative and its goals and share your concerns with the under representation of certain areas of the retail investment and pensions market in STAR’s membership, whilst noting that not all potential members fall within the FCA’s remit.”
“It is clear that service improvements will require greater collaboration between firms and we recognise the importance STAR has to play in facilitating that and the challenges you have faced in increasing STAR membership. To address these concerns, we are currently devising a communication programme to make explicit our expectations in relation to transfer times; and to underline that all firms involved in the transfer process should ensure transfer times are consistently prompt under the Consumer Duty.”
“It is our intention to use this programme to reiterate to firms the importance of STAR membership and accreditation.”
In addition to this, the FCA has also contacted CEOs and firms as part of its Platform Supervision Strategy. Transfer times continue to be a concern for the FCA, especially in light of the higher standards mandated by the Consumer Duty. Prompt and efficient transfers are crucial for ensuring positive outcomes for consumers.
The FCA has outlined its expectations for firms:
- Firms are expected to engage with STAR and support the principles and actions endorsed by the FCA in connection with the STAR initiative.
- Firms reporting poor transfer times compared to peers, and not already engaged with STAR, will face inquiries about their reasons for non-engagement. The FCA is prepared to act if progress on transfer times is lacking.
“As a vehicle to standardise and demonstrate reasonable industry transfer times, we expect firms to engage with, (if not already) and continue to, support the principles and FCA Public actions endorsed by STAR initiative. Where firms are reporting poor transfer times in comparison with peers and do not already engage with STAR, we will be enquiring about their justification for non-engagement and will act in the absence of progress on transfer times.”
FCA, September 2023
With the FCA’s on-going support and a focus on firms evidencing that they’re acting to improve transfer times, the STAR initiative is poised to make even greater strides in enhancing consumers experience of transfers.