STAR transfers initiative covers in excess of 35 million customers

2 April 2019

Summary

  • 21 firms, covering in excess of 35 million pensions, investments and policies, have already pledged to work within the STAR framework
  • Growing community of firms signing up to industry framework
  • Next stage of development will bring in technical working groups and a supplier forum – first Steering Group scheduled for May
  • FCA is now firmly focussed on transfers and re-registration as an issue

A growing community of firms have signed up to the STAR initiative. STAR is tasked with delivering an industry standard for the transfer and reregistration of consumer’s money and investments from one financial company to another. This will significantly improve the transfer performance of the industry.

To date 21 companies, including some of the key industry players, have pledged to work within the STAR framework, covering the savings and investments of 35 million pensions.

With reports of transfers regularly taking several months to complete, yet banking being subject to a 7-day switching guarantee, it should be no surprise that the FCA has taken a keen interest in resolving the issue for consumers.

The STAR framework was highlighted in the FCA’s Investment Platforms Market Study final report published in March, where the FCA made it clear it expects the industry to resolve the transfers issue or it would face “further regulatory action”. The FCA said it was encouraging firms to consider participating in STAR “as a way of improving the switching process and achieving better outcomes for consumers.”

With the wide-ranging and extensive industry support, the next stage of STAR’s development will bring in technical working groups and a supplier forum, with the first Steering Group meeting scheduled for May.

Tom McPhail, Chair of the STAR Steering Committee said: “This is about the industry doing things better for their customers but there is a commercial benefit too: In the transfer market we all have to deal with counterparties. It doesn’t matter how slick your own systems are, if the firm you’re dealing with isn’t willing to work quickly then you’ll still end up wasting time and money dealing with manual queries and you’ll have an unhappy customer.”

“Customers still sometimes have to wait for a pension schemes to write out a cheque and post it to complete a transfer. This one step in the process can add a week to a transfer. As a business, if you want to put a stop to this kind of arcane practice, you should sign up to STAR and encourage all other firms to do the same.”

“Hargreaves Lansdown’s own experience shows the benefit of firms collaborating: 75% of our SIPP transfers are completed in 11 days when executed electronically, but postal transfers take an average of 68 days to complete. There are even cases of transfers taking over 450 days.”

Regulatory reporting

The STAR framework was developed in consultation with the DWP, TPR and FCA (through TRIG, the industry working group). As part of the ongoing operation of STAR, Management Information detailing which firms have joined and how they are performing will be regularly submitted to the regulators. This means firms which don’t join or persistently fail to improve will be identified.

STAR is establishing technical forums to agree the processes for the collection and reporting of MI and a forum also is being establishing for service providers such as transfer and re-registration businesses. This will facilitate consultation, process improvement and consistency of standards on an ongoing basis.

In addition, the first 30 firms that sign to STAR will be awarded a Founder Accreditation Mark, a highly visible endorsement of adoption of the STAR framework and its objectives to improve end-to-end transfers.

McPhail added: “There is now both a moral imperative from the consumer outcome perspective and a regulatory imperative for firms to willingly address the transfer issue and with the FCA pointing in this direction the best way for the industry to show its commitment to improving its game is to join STAR and benefit from becoming part of the solution.”

Firms already signed up to STAR

  • Aegon
  • Aviva
  • B&CE (The People's Pension)
  • Barclays
  • Barnett Waddingham
  • DST Funds
  • Equiniti
  • Fidelity
  • Fusion Wealth
  • Hargreaves Lansdown
  • Interactive Investor
  • Invesco
  • Janus Henderson
  • L&G
  • LV=
  • Old Mutual Wealth
  • Scottish Widows
  • Standard Life Aberdeen
  • Transact
  • Wealthtime
  • Zurich


The main causes of delay (and costs to firms) cited by firms, include:

  • Waiting to hear back from the ceding provider after transfer requested
  • Waiting to hear back from the client when more/clarification of detail is requested
  • Requesting transfer discharge forms from an existing provider by post 
  • Chasing those forms if not provided within expected timeframes 
  • Chasing the plan info required if not provided by ceding provider
  • Sending discharge forms to the client to complete
  • Sending discharge forms to the ceding scheme
  • Process of setting up trade and settlement for stock transfer
  • The re-registration process for funds, especially overseas based e.g. Dublin-based funds.


This level of hand-offs and additional processes are where potential for errors to be made exists for both the ceding and receiving parties. By providing the structured framework which every firm can follow, and reducing paper and manual processes, STAR is automatically simplifying the procedure and reducing the risk/delay areas.  

For further information please contact:

Rob Kingsbury: 07900 931305
Matt Dransfield: 07737 650010

About Criterion

Criterion was formed for the industry in July 2017, as an independent, not-for-profit industry body providing Standards and Governance services. It was originally part of Origo Services Ltd and has been publishing process and integration standards for almost 25 years.

Criterion have publicly stated that the organisation is working towards full independence, building upon the formation of an independent Board of Directors, and Executive team, discussions ongoing with shareholders, this is estimated to be achieved by 2020. Criterion is uniquely positioned to facilitate and drive cross-industry engagement, helping organisations achieve higher levels of collaboration, reduce costs and achieve better outcomes for their consumers.

Criterion is trusted by around 400 companies to deliver standards underpinning millions of mission-critical transactions every week.  This includes:

  • Platform providers with combined assets under administration of over £400bn
  • 100% of the FTSE 100 Life Insurance sector
  • 100% of FTSE 250 Life Insurance sector
  • more than 95 leading pension brands across providers of SIPPs, Platforms and third-party administration services

In addition, Criterion Common Declarations have supported more than 2.2 million pension transfers, worth more than £110bn. Criterion has a proven track record and can demonstrate legitimacy and buy-in from across the financial services industry, having delivered leadership to influence continuous improvement across the industry for several decades. Criterion works in collaboration and with the assistance of various industry associations to drive positive behaviour.

TeX

TeX is a not-for-profit organisation which works with the industry to ensure that the maximum benefit is provided to all members. This new company is financially independent from TISA but benefits from being linked to the TISA brand through name, the expertise provided by the two corporate entity directorships and the administrative support provided by TISA. This gives the industry a number of benefits, including:

  • The strength of an existing successful industry body
  • The recognition of TISA as an independent cross-industry body by the FSA, other regulators and government
  • A critical mass of staff and infrastructure
  • Assurance to members that there will be no commercial influence over TeX
  • Reduced risk of a small group dominating the direction of TeX
  • Breadth of internal expertise and experience
  • Experience of running a not for profit, low-cost membership body
  • Experience of running a cross industry database (the ISA transfers database used extensively by all ISA providers, not just TISA members)
  • Lower set up costs