- At the first Fix LoA Action Group meeting, it was agreed that Pensions Dashboards might compel the industry to rapidly allocate resources to improving the Letter of Authority (LoA) process, if it is not ready and able to do so now.
- 3.9 million LoAs are sent every year, costing £442 million p/a due to its cumbersome process inefficiencies.
- 30+ advice firms, paraplanners, providers, tech suppliers and industry bodies represented at FLAG.
24 July 2024 — The Pension Lab, the specialist pensions fintech, facilitated the first meeting of the Fix LoA Action Group (FLAG) on 23rd July, bringing together over 30 organisations, including advice firms, paraplanners, providers, tech suppliers, and industry bodies.
FLAG was established in direct response to The Pension Lab’s collaborative #LogYourLoAPain campaign and the white paper ‘What Lies Beneath Letters of Authority, ' which exposed the annual £442 million wasted on unnecessary LoA process inefficiencies. The group's aim is to encourage coordinated action among key stakeholders to improve the LoA process, which has long been a source of frustration due to its manual and cumbersome nature.
Representatives from FLAG highlighted the insufficiency of current resources dedicated to improving the Letter of Authority (LoA) process, which often loses priority to more immediate regulatory projects. However, the introduction of Pensions Dashboards could compel organisations that are not yet digital LoA-ready to have to allocate resources rapidly.
Scott Phillips, CEO and founder of The Pension Lab, and one of the key speakers at the inaugural FLAG meeting, states, “There are other priorities facing all key stakeholders, so improvements to the LoA process continue to be relegated, but this needs to change. There are 4 million LoAs sent every year and due to various conditions and developments like Pensions Dashboards, the number is forecast to increase eightfold. Not being ready to address the £442 million that the current LoA process wastes every year is both highly frustrating and understandable. To enable providers, platforms and schemes to allocate priority resources that the LoA process urgently needs, it must come to the attention of the Financial Conduct Authority (FCA) and The Pension Regulator. The principles of Consumer Duty are clearly not enough to drive reform for LoAs.”
Billy Burnside, managing director of Criterion, the organisation responsible for creating and maintaining LoA Standards, adds, “Although some providers have made improvements to their LoA processes, these have mostly been made in isolation and accordance to their internal processes. The data in the LoA process needs to work for advisers, moving seamlessly between multiple external third-party systems to support ongoing adviser processes if it is to be efficient – and this is just one of the benefits that Standards can bring.”
If you are interested in participating in the next FLAG meeting, please contact FLAG Chair Justine Pattullo.