STAR has written Dear CEO letters to all long-term saving and investment organisations, inviting them to join STAR, following discussions with the FCA and DWP.
The issue we face is that current industry systems and processes are not consistent and transfer timeframes vary greatly between providers. This can lead to:
The Transfers and Re-registration Industry Group (TRIG) has defined a framework to deliver a cross-industry solution to this challenge. STAR, a not-for-profit joint venture between Criterion and TeX was created with the sole aim of implementing the TRIG framework across the industry and improving the transfer and re-registration experience for consumers across all products and services. STAR will build on and broaden existing good industry practice, not duplicate it. It is not a contract club that manages counterparty risk, that’s provided by TeX, or a framework for exchanging transfer data, which is provided by Origo Options, ISO 20022, SWIFT, Altus Transfer Gateway, Calastone Re-registration and Actuare Account Transfers.
STAR is in the process of implementing a framework which sets expectations for end-to-end standards, customer communications, and provides oversight and transparency. Chaired by Tom McPhail, Hargreaves Lansdown, it has already started making significant progress, with 25 companies already committing in principle. However, there is considerable work ahead of the industry to meet the expectations of the FCA and DWP.
The FCA published its widely anticipated IPMS final report on 14 March 2019 and welcomed the progress the industry is making to improve the switching process, most recently through STAR, to improve the efficiency of the transfer process across the retail investment and pensions sectors. The FCA is encouraging firms not already involved in this initiative to consider taking part as a way of improving the switching process and achieving better outcomes for consumers. “Their framework is aligned with our desired outcomes to improve the customer experience, reduce how long it takes to complete transfers and ensure consumers can move to a better value platform that meets their needs more easily.” (FCA, 14 March 2019).
The DWP and TPR have also welcomed STAR’s appointment and progress with Guy Opperman, Pensions Minister, urging firms “to commit to the TRIG framework, as this is an area the Government is keeping a close eye on.” (Guy Opperman, 24 October 2018).
The FCA will review progress made by the industry later this year and, “if needed, again in 2020 and take further regulatory action if we do not observe more efficient switching or that switching has not become easier for consumers and advisers. This could include revisiting our rules requiring prompt and efficient transfers and sunlight remedies.” (FCA, 14 March 2019).
If you want your organisation to be at the forefront of setting standards and reporting formats, which the STAR initiative will then implement, then we welcome the chance to discuss this with you in more detail.
More details are available at our website www.joinstar.co.uk, or please contact the STAR team on 0131 357 0100.