A financial planning firm has created a free database of provider details in a bid to help advisers with the “onerous” Letters of Authority process.
Speaking to FT Adviser, Scott Daniels, chartered financial planner and co-founder of Plus Group, discussed the ‘Provider Lookup’ database that was launched in partnership with Origo and NextGen planners as a direct response to the challenges created by the LOA process.
He said: “We have been providing an LOA support service for over 12 years now. One of the biggest challenges has been knowing where to send the LOA in the first place.
“With the constant mergers and sales of product providers, it was an ongoing challenge. We send thousands of LOAs each month, and naturally, our team started building a database of providers’ contact details and how LOAs needed to be sent.
“During Covid, we made this database accessible via our website and provided weekly updates on turnaround times.
“The new Provider Lookup is a natural progression of this, something we wanted to provide to everyone to help with what can be an onerous process.”
According to Daniels, the engagement and feedback since the launch had been extremely positive, with more than 1,200 active users and 70 per cent of users using the Chrome extension the firm built as well.
‘Slow and cumbersome’
He told FT Adviser the LOA process had been an issue for as long as he could remember, describing the process as “slow and cumbersome”.
“There is an obvious impact on the client, delays of months just to obtain information needed to provide advice.
“There is also an increased cost, as it remains a largely manual process in many cases, with wet signatures still required far too often,” Daniels explained.
He believed a large part of the issue was legacy systems and a lot of information on databases and systems not digitised.
“I remember having to retrieve microfiche records just to track down original documents.
“In addition, with multiple mergers and acquisitions, different systems and processes have been stitched together, making the entire LOA process an even more cumbersome challenge,” Daniels added.
Technology will also play a key role, but until providers update their systems and processes, most solutions will be more of a sticking plaster rather than a real fix
Plus Group created its standalone LOA service more than 12 years ago, to take the burden of adviser practices and put it in the hands of experts who deal with the processes every day.
“These are people who know the best times to call a provider to get through quickly, which department handles specific queries, and which providers are better at answering key questions and which ones need more nudging.
“This helps advisers manage their time, client expectations, workflow, and cash flow,” he explained.
Daniels hoped the consumer duty would help push some providers to improve the efficiency of their processes, particularly under foreseeable harm.
He added: “However, it will require regulatory focus, as providers are unlikely to invest what could be millions in fixing the underlying issues.
“Technology will also play a key role, but until providers update their systems and processes, most solutions will be more of a sticking plaster rather than a real fix.
“I’d also like to see the need for signatures removed, as it feels like an outdated way of verifying identity.”
Daniels alongside the Plus Group said they were actively involved in developing further solutions that leverage both technology and people to continue improving the LOA process.
