A new accreditation scheme has been launched to tackle the amount of time it takes to switch savings, investments and pensions from one provider to another.
The industry has often faced criticism for taking too much time to switch savings from one provider to another, with clients often having to wait weeks or months for switches to complete.
Therefore the Star initiative has now decided to award firms for good practice to speed up switches.
Andrew Marker, Star steering group chair, said: “It has been testing to reach a consensus and make progress and if it was easy, it would have been tackled years ago. I am delighted that after an intense and sustained period of work, the industry has galvanised to drive forward a scheme whose goal is to improve customer outcomes.
“Star measures the performance of companies when executing transfers, which provides regulators, customers, and their financial advisers with clear evidence of how firms are behaving and shows a clear commitment to focus on improving their performance. This creates a competitive advantage for organisations involved in Star, who are leading and driving industry change when it comes to switching.”
Launched in 2019, Star is a partnership between Criterion and Tex and aims to promote good practice among providers when moving clients' cash and assets from one firm to another.
To date 76 firms have signed up to Star and of these 18 have now been accredited. These firms fall into the following groups:
• Isa and GIA
• Personal Pensions, Sipp and Ssas
• Occupational Pensions
• Asset Managers
Star accreditation is designed to measure and accredit transfer performance across the industry.
There are three Star accreditation levels: gold, silver, and bronze, which are designed to both reward good performance and encourage improved performance.
The firms were awarded in 2022 for submitting at least nine consecutive month’s transfers data.
The awards are based on certain factors, one being that one area of good performance cannot outweigh the poor performance in another.
They are also measured on a range of key performance indicators not only on the overall transfer time, as there are also “a lot of mitigating factors to consider when reviewing the overall performance of an organisation”.
Star concluded the best way to fairly judge an organisation was to set up a points based metric system with a firm being scored on several key areas such as :
• The average number of days to transfer a customer’s assets
• How they communicate with their customers on that journey
• What percentage of their electronic transfers were reported for the accreditation.
The average ceding times for bronze, silver and gold accredited transfers across each group are:
- Isa - 12.7 days
- GIA - 14.8 days
- Personal Pension Sipp Ssas - 12.7 days
- Occupational pensions - 21.9 days
Rob Yuille, head of long-term savings policy at the Association of British Insurers, said these switches between providers are a key part of good customer service and healthy competition.
He added: “People will only transfer pensions and investments a few times in their lives, so it is really important to get it right, for each customer’s experience, for each firm’s reputation and that of the whole industry.