High standards where it suits, no standards where it doesn’t.

Well done to STAR for its initiative to get data standards for fund and pot transfers. My linked in profile is constantly reminding me that STAR is making a difference.Star

When it comes to moving funds within the wealth management sector, IFAs and their affluent clientele are better served by the STAR initiative than ever before.

STAR’s mission statement is on its Pitchbook Profile. The Criterion/TEX joint venture creates a

Provider of long-term governance solution to the transfers work. The joint venture engages in managing the good practice framework on pension switching, which proposed a 14-day maximum limit for cash transactions and 15 days for occupational scheme transfers, enabling financial companies to improve the customer experience by identifying and encouraging good practice.

(STAR may want to revisit the first sentence)

Who are the beneficiaries of the STAR initiative?

The customer experience of switching funds is one that only a small part of the British population engage in. It is the part served by IFAs , TPAs  and the fund management platforms.

While the funds industry is able to organise itself to improve the efficiency of its work to that section of the population, many of the organisations committed to the STAR initiative have not been so concerned about providing combined pension forecasts or pension dashboards.

We are still consulting on the data standards for us to see our pensions in one place , 15 years after the project has begun.

So while the 66 can congratulate themselves on improving the wealth of the few, the Pensions Dashboard’s Programme’s consultation to create common data standards for the pensions dashboard limps into it final stages with minimum publicity or seeming interest either from fund managers or the platforms they sit on.

Worthwhile initiatives such as the FCA’s consultation on a common definition of value for money are similarly downgraded relative to the all-consuming passion to improve the lot of the funds, fund platforms and wealth managers.

There is a simple reason for this and it is profit. Wealth management is profitable and its customer base is precisely the kind of people you’d expect to meet because your children go to the right schools. I remember going to a couple of financial talks at my son’s school (a posh private school in south-west London), just look at who sponsors all those inter-school sporting events that Mums and Dads flock to.

I don’t blame wealth managers for targeting the affluent, but I feel queasy when I hear STAR tell me its initiative  is “good for you and good for your customers”

There are many reasons for your organisation to sign up for STAR…

  • You’ll have your say when it comes to defining good practice in transfers
  • It demonstrates your commitment to best transfer practice in the eyes of both consumers and industry stakeholders
  • It provides a showcase for highlighting outstanding performance

Participating firms will also benefit from greater certainty when dealing with other providers, leading to fewer queries and reduced administration costs. In addition, consumers will benefit from knowing their provider is part of the STAR scheme, and they can expect better communication, universal standards, continuous improvement and improved transparency.

The reality is that STAR and its initiative serves a customer base already well served, meanwhile the problems of financial exclusion from this magic circle of service, persists,

This magic circle is already served by a large number of trade bodies

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The Transfer and Re-registration Industry Group (TRIG) – Industry-wide framework for improving transfers and re-registrations, June 2018 Progress Update

Let me list the people for whom there is no trade body

  • There is no trade body for the people who aren’t picking up pension credit or being means tested on payments from their pensions under universal credit.
  • There is no trade body for the 1.7m people over-paying pension contributions under net-pay.
  • There is no trade body campaigning for a pension dashboard to be delivered in a timely fashion.
  • There is no trade body for the 90% of people saving for retirement who are not using wealth managers  and the complex investment administration of the wealth industry.

All these people have no industry representation because they are intrinsically unprofitable.  Trade bodies you need to be funded –  the fund industry can afford all these trade bodies because it is so profitable.

This initiative shows what the pensions industry can do but…

There remains so much more to be done- that is not being addressed.

The financial services comforts itself that by signing up to the Star Initiative, it has demonstrated its governance credentials. I support the aims of STAR.

Well done to the organisations who are working together on fund transfers

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But please – let’s not think that this is job done.

When I see firms participating in the STAR scheme  working as hard to deliver the dashboard, reform the distribution of tax-payer pension incentives, promote a fairer system of pension benefits and enable their customers to properly understand value for money, I will start patting them on the back.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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