InvestmentsMay 14 2020

How providers are adapting their policies for Covid-19

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How providers are adapting their policies for Covid-19
ByDavid Thorpe

Providers across the asset management industry have adapted their processes to help advisers cope with the Covid-19 pandemic.

However, many of those companies are unsure whether the measures they are implementing now will survive the world after lockdown.

One of the trickiest areas for advisers during Covid-19 is the issue of ‘wet signatures’, that is, the requirement to get a physical signature on paper from a client before any action can be taken.

The view of the Financial Conduct Authority is that wet signatures are not explicitly required, so scanned signatures are fine, but beyond that, the regulator stated the validity or otherwise of signatures is a “matter of law”, and urged providers and advisers to be aware of the legal position. 

One adviser, who did not want to be named, says this presents a problem if the client is elderly, as it is presently against the government’s guidelines for an adviser to meet that person.

One of the trickiest areas for advisers during Covid-19 is the issue of ‘wet signatures

The adviser says that his client is over 70-years-old and in the at-risk group, meaning they are self-isolating. The client had a request, which was to make a withdrawal from their portfolio in order to pay for care.

The adviser wished to do this, but the platform required a wet signature from the client, rather than the electronic signature that was on file.

The adviser could not find a way around this, and in the end the platform in question insisted on phoning the end client, to get the authority.

Key points

  • Covid-19 has created issues around wet and electronic signatures
  • Many providers and platforms have adapted to seeking electronic signatures
  • Post-pandemic, there is likely to be a longer-term adoption of some of these measures

The various different adviser platforms have adopted different approaches. 

Toby Larkman, chief commercial officer at the Embark platform, says: “[We are] highly automated and as a result we can open and operate an account without the need for wet signatures in almost all circumstances.

“We only have a small number of scenarios where signatures are required, generally driven by third-party needs, and we have adjusted our processes to limit the need for wet signatures further. 

“We are aware of the increasing risks of scams and fraud attempts and have reviewed our processes involving wet signatures alongside our financial crime specialists to ensure that we minimise the need for them without placing the customer or ourselves at risk.”

Going digital pre-Covid-19

Some platforms have been moving in this direction before the crisis hit.