Letters of Authority and transfers still a major pain point in the financial service industry

Six different people holding/rubbing their heads as they have a headache.

By AdviceBridge

The handling of Letters of Authority (LoA) and transfers remain a major issue in the financial services industry. Mention the subject to a room full of financial advisers and you’ll likely be met with a collective groan. 

It causes much frustration, perhaps because it’s a process that should have been digitalised a long time ago. 

Much of the annoyance comes from the inconsistencies between different providers, which causes multiple issues for advisers.

But why do these issues persist?

Key providers are still using a non-digitised approach to LoA and transfers

A report compiled by the lang cat found that providers still display an inconsistent approach to accepting LoAs. For example:

  • Many providers require original signatures 
  • Some accept scanned emails
  • Some accept DocuSign 
  • A few want it as a fax. 

This lack of a fully joined-up, or digitised approach is one of the key reasons why the process takes so long. 

Further, the report found that, to take control of their client’s plans, advisers needed to create between 5 and 15 LoAs and transfer forms. 

Testing numerous worst-case scenarios they learned that from submitting an LOA to getting full, satisfactory data, the time frame often ran to several months. 

From the same report, 70% of surveyed financial businesses stated their completed LoA process could take up to six months. 

Currently, the way the providers work with financial advisers is disconnected; every provider has their own forms and way of working. 

This is inefficient, expensive, and slow.

So, it’s no surprise that many financial planners would love to get rid of the entire LoA process.

Implementing a fully digital and standardised LoA will improve the process

As well as discussing how many LoAs the many advisers had to complete and the time the process takes, the lang cat report also found that LoAs are causing many advice firms significant barriers to becoming more efficient. 

LoAs could be an area where providers can see a quick but important win – both in terms of improving efficiencies and productivity for themselves and advice firms and also in helping the financial industry deliver better service to the end client. 

This could be achieved by implementing a fully digital LoA process. 

Digitisation would allow IFAs to deliver a great service to their client

Meanwhile, for financial advisers, a fully digitised process could enable IFAs to just push one button to establish the necessary authorities in one place before sending it securely to all the relevant providers and platforms on the system. 

This would save a substantial amount of time when dealing with numerous LoAs and multiple providers.

With good technology in place, financial advisers could finally know where they are on the LoA and onboarding process. 

Furthermore, it would allow advisers to keep their clients more informed at each stage of the process. This, in turn, would help to keep clients engaged in their financial planning. Perhaps more importantly, it would allow IFAs to deliver a great service that reassures and keeps clients happy.

However, until the disconnect between the providers and financial advisers is reduced, the LoA process will remain unchanged. 

In the meantime, there are ways to help you reduce the stress and hassle you may experience when dealing with LoAs and transfers.

How to reduce the stress over LoAs and transfers

The AdviceBridge system has a database of providers showing who accepts digital signatures and, if not, how the provider prefers to receive their paperwork. This enables you to quickly select and follow the correct process.

All the information is stored on one system, so you, or your administrators, don’t have to spend valuable time looking up and finding out how all the individual providers work and how they want to receive information from you.

The system also automates the LoA and transfer process, without the need for you to diarise follow ups or update other systems. This will reduce your stress and make the process less time-consuming – for everyone involved.

Get in touch

To find out more about how AdviceBridge can help you to reduce the stress that LoAs and transfers can cause, and more besides, please get in touch. 

Email hello@advicebridge.com, book a demo, or call us on 020 3925 3850.