What do financial services providers and marriage have in common?
If you have had no prior relationship – financial or anything romantic on paper – it is easy to sign up to a financial or marital contract and blooming difficult to extract yourself swiftly from the agreement later.
Transferring to another provider is so tricky that many advisers and clients stick with a platform for years, despite the fact they feel let down and undervalued by them.
Many advisers stick with providers because they fear suffering the same issues FTAdviser revealed were being faced by advisers who have turned their backs on Aegon and Legal & General.
Darren Cooke, director of Red Circle Financial Planning, said he moved two clients away from the provider after he felt the service had "deteriorated" following the provider's shift towards offering mainly digital services.
This shift saw Legal & General stop taking phone calls and corresponding through online platforms instead.
The clients held property in self-invested personal pensions (Sipps) and were switched to a specialist Sipp provider in November 2017.
It isn't right that the closest comparison I can think of to ditching a product provider is trying to divorce your spouse.According to Mr Cooke, it took L&G more than a year to transfer the two clients at a cost running into thousands of pounds in fees.
Advisers this week also revealed they were disappointed by how long it is taking to transfer clients away from the Aegon platform.
Advisers were told by Aegon in June that a transfer of non-cash assets off the platform, which should take two days according to the service level agreement, would take 12 days, while transferring cash, which should take five days, was to take 10 days.
But Jenny Griffiths, director and chartered financial planner of CP Griffiths in Stourbridge, has tried to move her clients off the platform and found the average time it took was one month.
Based on these reports, I think platforms should expect that the FCA is going to act on what it proposed in a 110-page interim report on the state of the platform market, published back in July.
The FCA suggested rules requiring platforms to put in place open data solutions where customers can export their usage history (including trading patterns, pot sizes and information about their funds) to third parties.
Platforms were also told to buck up their ideas when it comes to facilitating switching.
The industry was informed the FCA was considering ordering it to publish data on transfer times so consumers and third parties could compare platform performance and put pressure on platforms to make improvements.
If platforms haven't improved the turnaround times for switching by the first quarter of 2019, when the FCA will issue its final report on this issue, the watchdog stated it will consider banning exit fees.
The FCA will also look at requiring the ceding platform to switch consumers to the receiving platform’s share class before a switch takes place.
This action from the FCA is clearly needed.
It isn't right that the closest comparison I can think of to ditching a product provider is trying to divorce your spouse.
I can understand why multiple governments get cold feet about making divorce easier – they don't want to be accused of undermining marriage and shaking the foundations of society as we know it.
But it shouldn't take anyone longer to switch financial services providers than it would take them to end their marriage.
Regulators would make society a better place – and increase people's faith in putting their cash in financial institutions – if they made it easier for them to switch their cash to another provider if they felt dis-satisfied.
emma.hughes@ft.com
