A client has been left waiting for £5,000 worth of pension payments for at least two weeks due to a delay in information sharing between Quilter, their old platform provider, and Fidelity, the platform they were migrating to.
The adviser, which inherited the client from another IFA, decided to transfer the client due to the fact they were their only customer using Quilter’s platform. The adviser also believed Fidelity to be a “much cheaper” option for the client.
London-based IFA Cleona Lira told FTAdviser she began chasing Quilter in mid-September for information to complete the transfer, which included details such as the percentage of lifetime allowance used, the date drawdown commenced, and the income paid in the current tax year.
She said Quilter took “weeks” at a time to reply to emails, but offered no clarity on how or when these details would be transferred to Fidelity.
Fidelity on the other hand did not realise it was missing some of the information needed to action the forthcoming payments to its new client. The platform only realised this when the first payment failed.
The client had asked for an ad hoc lump sum of £4,000 and it was delayed by two weeks. They also asked for £1,000 per month, which was their normal monthly arrangement prior to transfer, and this was also delayed by two weeks.
The IFA said her client was on their first holiday in Italy post-Covid-19, only to be weighed down with the stress of income delays.
With no quick solution offered by either platform, the IFA decided to create a crystallisation instruction into a new drawdown account, which forced her to sell down from the funds to cover a pension commencement lump sum payment. This can take up to 13 working days.
Quilter sent all the information Lira needed on October 29, the same day she tweeted about the problem.
But the IFA said funds are still being re-registered slowly, which means not everything has moved across yet.
“A lot of platforms are just very poor communicators upon transfers out,” said Lira. “This was a miscommunication all round.”
Both Quilter and Fidelity have offered to compensate the client. Fidelity offered £50, Quilter did not disclose the amount it offered.
In-specie vs cash transfer
Quilter blamed fund groups it works with which are not set up for digital re-registration, arguing a cash transfer would have been better for the client in this situation because it would have been completed the same month.
“Transferring via re-registration can take longer when fund groups are not set up for digital re-registration and require wet signatures to be supplied on stock transfer forms,” a spokesperson from the firm said.
“This can extend the timelines as authorisation, transmission and receipt processes will all be manual.”
Platform trade body UK Platform Group has also highlighted the lack of progress made by fund managers on digitisation, particularly in relation to platforms’ client transfer times.
The Financial Conduct Authority has reiterated, however, that it has no intention of shifting the focus to fund managers - leaving responsibility firmly with platforms.