This episode of Professional Adviser TV sees Percy-Baxter Wealth Management financial adviser Natasha Percy-Baxter and Saturn co-founder Rohit Vaish join the team in the studio to talk about the letters of authority (LOA) process and the frustrations that delays are causing advisers.
LOAs are a crucial step in client onboarding and pension tracking and have been described as "horrendous" by Percy-Baxter, who has called for industry-wide standardisation.
Speaking on Professional Adviser TV's Advice Lens series, Percy-Baxter said LOAs can be a powerful tool but inefficiencies and inconsistency across providers are undermining their effectiveness.
"LOAs could be really magical. I position it to clients as taking admin off their shoulders but that magic's being destroyed by the inefficiency and inconsistency in the process," she said.
She added: "Some clients handle the process themselves and are shocked by how horrendous it is."
Vaish set out that technology has a role to play but warned that automation alone cannot resolve the problem.
He said lessons should be drawn from other industries. "When you look at current account switching, regulation and bank incentives aligned to make it really easy. Imagine if you could log into your… pension app, request a switch, and it calculated yield, gave warnings, and processed the switch instantly. We need that kind of alignment across pensions."
Vaish added that Saturn is already using artificial intelligence to follow up with providers and process information automatically, reducing the need for human intervention. But he cautioned, "tech can't solve waiting times, that's on providers."
"Advice firms are hiring full teams just to chase LOAs, when that effort should be focused on clients. Automation will help, but without cultural and operational change from providers, the problem won't be fixed."
Both Percy-Baxter and Vaish agreed the solution requires more than technology. It needs cultural change and regulatory alignment.
Percy-Baxter said advisers should be "more vocal" in calling out providers that perform badly and praising those that do well, while Vaish stressed the need for collaboration.
The team will be back in two weeks' time with the next edition of Advice Lens on Professional Adviser TV.
In the meantime, you can catch up on the last episode of Professional Adviser TV's Advice Lens, where Elevation Group director Matt Black and Foresight partner Hugi Clarke joined the team in the studio to talk about the impact of inheritance tax (IHT) on pensions for both advisers and clients.
