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 signaturesThe 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.
A spokesperson for the Aegon platform says investments that have been made in recent years have contributed to the company becoming more digitally focused, but recent events have accelerated this work.
The spokesperson notes: “With a heavy expenditure on online services and an ongoing investment to digitise already in place, the current situation has accelerated our processes around wet signatures.
“We’ve yet to conclude exactly what we’re doing longer term, but our key driver will be working with advisers to prioritise what is most important for them.”
A spokesperson for the Aviva platform says: “On the adviser platform, we have been able to accept electronic signatures for some time.
“Wet signatures can be scanned and uploaded to the platform, and we can proceed on this basis without having to physically receive the declaration.”
A positive experience
Alan Chan, an adviser at IFS Wealth and Pensions in London, says he has found it to be a positive experience.
He says: “Experience has generally been good as the main providers are adapting to new ways of working and accepting scanned applications, letter of authorities and so on.
“However, some providers still insist on wet signatures for certain parts of their process. For instance, although Transact will now accept scanned applications for existing clients, they will still require wet signatures for new clients.
“Also, pension schemes where trustees are involved have always been a bit of a pain to deal with in normal times and even more so in this current climate as they often require wet signatures and will not compromise.
“Luckily, for all current cases we’ve sent all the required signed documents well before offices were closed, so they’ve already been accepted and scanned onto their systems.”
Transact has its own system for new clients.
A spokesman for Transact says: “For new clients we will establish portfolios based on a scanned copy of the signed form being submitted to us online – we will accept deposits and open new wrappers immediately.
“We do ask for the original hard copy to be sent to us before we allow any withdrawals.
“However, we are introducing some new functionality this month after which we will no longer require the original to be posted to us. We are also considering accepting e-signatures”.
Mr Chan adds that the problem can be as basic as the vagaries of the postal system.
He says: “In one case I’m currently dealing with right now, the delays we experienced were the other way round.
“We are trying to transfer away and secure an annuity for the client and they have got all the forms from us, but the delays are coming from the scheme administrator and trustees because they needed all their trustees to sign various parts of the transfer forms with wet signatures.
“The issue of course is that they are all working from home in different locations, and so after one trustee signed it, they then needed to post it onto the next one and finally back to the scheme admin.”
Pension provider Scottish Widows had removed the requirement for wet signatures as part of its process for buying an annuity, and has recently extended this to other products.
A Scottish Widows spokesman says: “Pre-coronavirus, our customers could already switch pension funds, increase contributions and apply for protection online or over the phone, without the need for wet signatures.
“We have now also removed the requirement of wet signatures for other requests. There may be times, for security reasons, where we need to ask for email confirmation from the customer.”
Alan Steel, chairman of Alan Steel Asset Management, says he has not yet encountered any problems with providers and signatures, and is now embarking on a three-month trial of using electronic signatures for his company’s interactions with clients.
New normal
Nucleus expects this to become a more widespread practice.
Barry Neilson, chief customer officer at Nucleus, says: “As a business we already used scanned signatures to some extent, and as a result of the current lockdown this is now being used extensively.
“We see the industry adopting this widely going forward, and after the lockdown we expect to continue to accept scans of signed documents, with the current situation accelerating our plans to provide paperless options for most of our documents.
“We are also in the process of formalising how we would accept e-signatures, but we are not going to rush this.
“Compromising our audience’s security for the sake of efficiency is not something we would ever consider, so everything is being evaluated thoroughly to see how viable the different methods of obtaining e-signatures are.”
As an industry, Mr Neilson says sending documents through the internet rather than the postal service is more efficient, and will become the standard way in which advisers communicate with platforms.
While the postal option will always continue, he added he expects most of the adviser audience will submit documents virtually from now on.
David Thorpe is special projects editor of Financial Adviser and FTAdviser
