Exclusive: Industry urged to support Star initiative after heavyweight backing

Firms are being urged to show “care about doing things efficiently” by backing an initiative which aims to deliver long-term governance solutions to occupational transfers.

Star, the industry group aiming to bring down the amount of time it takes a member to transfer their pension savings, said that despite government, trade body and large firms backing project, some firms are still reluctant to sign up to the body.

The initiative, supported by the Financial Conduct Authority (FCA), The Pensions Regulator (TPR) and the Department for Work and Pensions (DWP), currently has 21 pension organisations signed up covering a total of 35 million accounts.

Star Steering Group founding chair, Tom McPhail, said they are in talks with another 30 to 40 firms.

Those who have already committed to the initiative include Aegon, Aviva, B&CE, Barclays, Legal & General, Standard Life Aberdeen and Zurich.

“Getting those big players is really important because that give us immediately wide coverage, and we also have other participants in the echo system,” McPhail said.

“There are some firms who will look at this and say I’m not going to do it until I’m forced to, and you are always going to get the firms that don’t care about customer service. One firm has said to me, ‘we are already quite good at doing transfers, so why should we bother?’.

“The problem you come down to, is that if you don’t make the move other firms won’t, and as long as you have an excuse not to, the firms that are less enthusiastic about making things work well are not going to do it until they see we are normalising the process.

“For those saying, ‘yeah we care about transfers, but we’re not going to sign up’, how can you expect your customers to believe you care about doing things efficiently.”

In March, the FCA published its Investment Platform Management Survey and welcomed the progress Star had made to improve the efficiency of the transfer process, but that would be reviewing the process and could “take further regulatory action” in 2020 if switching had not become easier for consumers.

The framework, developed by the Transfers and Industry Re-registration Group, specifies three weeks for an occupational pension transfer, and will aim to deliver benefits to both consumers and firms looking to gain from “consistent and improving standards”.

McPhail added: “As this is voluntary, there has always been the threat sitting on our shoulders that if we don’t make this work the FCA and the DWP will have to come and regulate and legislate, but they really don’t want to have to do that.

“If everybody does this efficiently it will save money, keep the regulator off your back and show you care about transfers.

“The firms that are less enthusiastic about making things work well are not going to do it until they see we are normalising the process.”

Star will run a bronze, silver and gold accreditation process, rubber stamped by the FCA, in a move which the group hopes will “shine a spotlight” on firms that are underperforming.

The steering group will hold its first meeting in May, while the body is currently looking to hold seminars across the UK.

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