Providers to be named and shamed on pension transfers

Providers to be named and shamed on pension transfers

Fintech company Origo is in talks with providers that use its pension transfer service to disclose individual transfer times, in a bid to improve transparency.

Paul Pettit, managing director at Origo, told FTAdviser that the company is currently in discussions with all providers to get their consent and expects to be able to publish the first report at the beginning of next year.

Mr Pettitt said: “We publish performance data to them [providers] monthly, so they can each see their relative performance, so they have all of that already.

Article continues after advert

“The debate really is whether that data should be published to the industry at large.”

Origo's Options Transfer service is used by more than 95 firms, including the major pension consultancies, life companies (which collectively own Origo), platforms and self-invested personal pension (Sipp) providers.

Origo estimates the vast majority - around 90 per cent - of pension transfers in the contract market go through its service.

Mr Pettitt said: “If users of [Origo] Options publish their data, then the rest of the industry can see who the good guys are, and by inference they can work out those who aren’t at the service or don't publish their data.

“By publishing data, they [providers] can see the benchmark they should be aspiring to.”

Last year, more than £25bn was transferred out of pension schemes, the largest volume in a single year since Origo’s service was launched in 2008.

At the end of 2016, it reached a milestone £100bn of pensions transferred through the service from more than two million transfers.

According to Mr Pettitt, the average transfer time through Origo is “about 12 calendar days, of which three and a half is money going through the banking system”.

He said: “So, providers are doing everything they need to do in eight or nine days.

“If the rest of the industry could meet that set time table, then costumer outcomes would be in a far better place than they are at the moment.”

Susan Hill, chartered financial planner at Susan Hill Financial Planning, said that Origo’s initiative “is fantastic”.

She said: “It is about time providers realise how long they are taking [in doing these transfers], because they need to be shown up.”

Ms Hill is currently facing difficulties in an in-specie pension transfer, from one platform to another.

She said: “It's taking a long time, I think we are in week eight at the moment. It is just not good enough.

“It is far too long, and they [providers] each blame each other. I don't know what the problem is and who's causing the delay.

“So, if they were to see their own results that might speed them up.”

Several providers have been in the firing line due to their pension transfer times.

Back in March, Aviva, Standard Life and Prudential, were accused by robo-adviser Nutmeg and online pension provider PensionBee of discriminating against them, by taking three times as long to transfer client's cash.