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Why this STAR is born

News

Why this STAR is born

5 April 2019

Tom McPhail, Head of Retirement Policy, Hargreaves Lansdown

People have a right to expect financial companies to execute their instructions quickly, efficiently and securely. When it comes to transferring investments and pensions from one company to another, for years it has been normal to tolerate the industry’s inability to perform this basic task in a timely manner. We have got used to transfers taking many weeks, often months to complete.

For investors this uncertainty and delay erodes confidence in the system, discourages engagement, undermines market competition and can sometimes cause acute financial problems. For someone approaching retirement for example, who is trying to consolidate their pensions and to start an income withdrawal, delay can cause real hardship.

For financial advisers the cost of failure can be measured in additional administration costs and unhappy customers. It is in everyone’s interest to get this sorted.

Around 2 years ago the FCA announced enough was enough and demanded the industry sort out the problem. Because of the complex ecosystem involved, it isn’t possible for any one firm to fix this on their own. Transfers involve platforms, insurers, fund managers, re-registration and transfer intermediaries, custodians, third party administrators,
trustees etc. It also falls across multiple regulatory jurisdictions, with the FCA, Pensions Regulator and DWP all having an interest in different elements of the system.

Regulation or legislation could be applied as a last resort but it would be complicated, time-consuming and everyone, the regulators included wouldn’t like it. It would probably take years to define and implement effectively. So a voluntary industry-led solution is by far the best answer for everyone: we own the problem and we define how it gets fixed. The industry formed the Transfers and Reregistration Industry Group (TRIG) comprising 10 trade bodies. No one else was available, so I ended up Chairing the project. In consultation with the regulators, we drafted a framework for good practice transfers, based on service standards, performance monitoring and regular reporting to the regulators. We then
appointed a not-for-profit joint venture comprising TEX and Criterion (the standards offshoot of Origo) to take on the governance and administration of the standards under the brand ‘STAR’.

We’ve now got 22 companies signed up to the STAR transfers framework, with more companies joining all the time. These are the good guys, the companies that actively want to promote solutions for the benefit of all. We know there are pension companies and administrators that are happy doing things badly, relying on outdated systems and processes; sending pieces of paper in the post and waiting weeks to get things signed off. The only way to get these laggards and poor performers to improve is to normalise adherence to a commonly agreed set of standards.

We are also regularly reporting to the FCA and the DWP the names of the businesses who have signed up to STAR. As the system beds in we’ll report transfer performance data so firms that are doing well will be seen to be doing well. Everybody wants this problem solved. This is the moment when it happens. So I ask every insurance company, fund manager, third party administrator, custodian and platform to sign up to STAR and become part of the solution. I also ask every scheme sponsoring employer, every trustee and IGC, every compliance department and shareholder to challenge the executives you work with: have they signed up to STAR yet and if not, why not. 

© 2022 CT Holdings and Services Limited (CTHS), a joint venture between TISA Exchange Limited and Criterion Tec Limited.

All rights reserved. Company number: 11700872.

SERVICING AGREEMENT

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A problem was detected in the following Form. Submitting it could result in errors. Please contact the site administrator.
1. APPLICANT COVERED BY THIS REGISTRATION.
Please note this registration will not be processed if Step 1 has not been completed.
If your organisation is acting only as an affiliate, you do not need to complete Step 2.
2a. CHOOSE YOUR BRAND
STAR manages the administration of third-party access to the portal, rather than the member firm. This allows for a smoother transition for the member firm and allowing immediate access to the supplier to submit MI on their behalf. STAR will hold an approved list of users per supplier, which will be allocated to your account at the point of registration. This ensures each ‘external’ user has the same access across all their client accounts. Supplier access is restricted and they do not have any ability to see any company information for any client other than what they submit on your behalf. You as the member control access for any other users within your organisation. We will include a more detailed description about the user access on your welcome email and it is clearly defined as part of the User Guide.
STAR RELATIONSHIP MANAGER FOR FIRST BRAND
This person will be the main contact for all notices and other formal communications under this agreement and will be responsible for the administration of the members portal access (including without limitation the providing, updating and removing of authorised User access to the portal during the Term).
2b.
STAR RELATIONSHIP MANAGER FOR THE SECOND BRAND
This person will be the main contact for all notices and other formal communications under this agreement and will be responsible for the administration of the members portal access (including without limitation the providing, updating and removing of authorised User access to the portal during the Term).
2c.
STAR RELATIONSHIP MANAGER FOR THE THIRD BRAND
This person will be the main contact for all notices and other formal communications under this agreement and will be responsible for the administration of the members portal access (including without limitation the providing, updating and removing of authorised User access to the portal during the Term).
2d.
STAR RELATIONSHIP MANAGER FOR THE THIRD BRAND
This person will be the main contact for all notices and other formal communications under this agreement and will be responsible for the administration of the members portal access (including without limitation the providing, updating and removing of authorised User access to the portal during the Term).
3. INVOICE INFORMATION
Invoices are sent by email as standard, if a printed invoice is required please note the address and your requirements in the additional information section.
4. DECLARATION
Before we can process your Brand Registration a STAR Servicing Agreement needs to be signed. Your signatory must be duly authorised for and on behalf of the organisation named in this application.
We only need one signed STAR Servicing Agreement which will cover all brands that you wish to register.
STAR will email the servicing contract to the signatory email address (provided below) through our electronic platform Yoti. This declaration must be signed in order for your application to complete, once we receive the signed agreement we will instruct our finance department to issue your invoice.
You have already supplied a STAR Servicing Agreement, we will be in touch if we need anything else.

Application submitted successfully

Thank you for applying to join the STAR accreditation scheme. We will endeavour to respond as soon as possible using the contact information you’ve provided to us.