The Pension Lab has launched a collaborative campaign called #LogYourLoAPain with support from Criterion and several other organisations. This initiative aims to encourage advisers, planners and wealth managers to count letters of authority (LoA) to enable a more detailed picture of the current situation and drive digital solutions.
An LoA is a legal document that authorises a third party to correspond with providers on behalf of its clients. When clients approach an adviser for advice, they often have numerous existing policies in place. Obtaining a LoA is critical for the adviser to determine the most appropriate course of action and ensure they make the best financial decisions for their future financial well-being. However, LoA requests are generally manually handled, causing laborious, inconsistent, and costly work.
While technology advances, the LoA process has remained needlessly stuck in the past, causing frustration for all involved, long delays for customers and potential reputational damage for firms.
New Consumer Duty rules set by the Financial Conduct Authority (FCA) stipulated that firms must produce good consumer outcomes and get rid of unnecessary and harmful barriers – rules, which the current LoA process often doesn’t conform to due to the process and time it takes to receive completed LoAs.
Criterion’s LoA Standards supports advisers onboarding new clients by providing an effective and automated method of gathering information about clients’ existing policies, speeding up the process and reducing human errors taking place. The Standards can be used to deliver critical key information in a structured way, meaning that it can be consumed and processed directly by adviser software without the need for manual keying.
Billy Burnside, Managing Director of Criterion commenting:
"The LoA process has been a persistent source of industry frustration for a long time and needs tackling. The #LogYourLoAPain initiative aims to highlight the true cost to advisers and providers of maintaining current practices and enable firms to see the benefits of working collaboratively and identify solutions to improve this lengthy and outdated process. Criterion’s data and technical LoA Standards were developed with many of the key industry stakeholders to facilitate a seamless, automated LoA processes that increase consistency, reduce time, effort, and cost; and – critically – support the delivery of better outcomes for consumers. The Pension Lab initiative will provide a fuller picture of the LoA issues and hopefully drive the industry to adopting collaborative solutions such as the Criterion Standards."