Ben Cocks
Same day transfers - the industry’s best kept secret
Written by Ben Cocks on
The completion of a transfer in less than a day sits in stark contrast to the examples regularly reported in the financial services press.

Rich Mayor from Fundscape wrote a blog last week on his experience of transferring an account between platforms (https://fundscape.co.uk/how-easy-is-it-to-transfer-from-one-investment-platform-to-another/). He transferred a Stocks and Shares ISA from Fidelity to Hargreaves Lansdown including an in-specie transfer of the 3 funds held in the ISA. He gave his instruction via the Hargreaves Lansdown portal in the morning and was delighted to find the transfer completed and all the funds available later on the same day.

The completion of a transfer in less than a day sits in stark contrast to the examples of transfers taking weeks or even months regularly reported in the financial services press. Whilst undoubtedly the industry has a long way to go on transfers, it is worth examining the reasons behind good examples of customer service so we can best work out how to address poor customer service. If some providers can execute ISA and pension transfers in a day then why can’t everyone?

The most remarkable part of this story is not the time the transfer took but the breadth of the industry collaboration that underpins it.

There were four organisations directly involved in the transfer: Hargreaves Lansdown, Fidelity and two fund managers (responsible for re-registering the assets). These companies used two different technology suppliers, Calastone and Altus, whose systems can interoperate (although in the spirit of balance I should point out that Actuare and Origo can also provide compatible systems). These systems interoperate using open standards defined by the UK Funds Market Practice Group (UKFMPG) and the legal cover for providers executing the transfer is governed by TISA Exchange (TeX).

Over a hundred UK financial services organisations have participated in the construction of this ‘open transfers’ framework. Most of the work is done for free and every organisation gets an equal say in decisions. We hear a lot about the importance of collaboration but it is rare to see co-operation on this scale or with such a direct impact on services to the end customer.

But there are still some challenges to resolve. Not all ISA and pension transfer services can yet interoperate with the open transfers framework but instead sit in isolated silos. Some providers are yet to join in and can only respond to transfer requests on paper. The industry still struggles therefore with unnecessary costs and a stubbornly high proportion of transfers still being processed manually.

Nevertheless, we should at least recognise the good progress that has been made. Now I appreciate that the headline “customer gets a good service because providers were able to work together successfully” is hardly likely to set editors’ hearts racing but it might serve a counterbalance to the usual bad news diet of mis-selling, high fees and customer complaints.

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