Pension Lab has launched the Letter of Authority (LoA) Performance Index (LPI).
The first of its kind tool is designed to help providers, platforms and pension schemes benchmark their LoA processing, drive collaboration and raise industry standards.
A LoA is a legal document enabling third parties such as financial advisers to request information on client plans and policies.
Pension Lab said that despite its essential role, the process is “fraught with inefficiencies and security risks”. It often takes weeks to complete owing to inconsistent formats, wet signature requirements and repeated chasing.
The LPI will draw on information from 230 different providers, platforms, master trusts and third-party administrators. It ranks the performance of the 10 highest-volume LoA processing organisations anonymously.
See also: NextWealth finds MPS assets jumped by a third in a year
Pension Lab will publish the LPI quarterly, starting with Q3 2024 data. Q4 2024 data to be published in February 2025.
Scott Phillips, CEO and founder of Pension Lab, said: “The LoA process underpins many essential transactions, including transfers, and its inefficiencies impact not just advice timescales but also providers’ ability to deliver consolidation services to non-advised consumers.
“Fortunately, Pension Lab’s unique position enables critical insights into LoA performance, delays and their causes.
“Our LPI complements our broader initiatives like FLAG (Fix LoA Action Group) to help providers, master trusts, and platforms prioritise improvements that benefit Consumer Duty compliance and cost-savings, and importantly deliver improved servicing for advisers and consumers alike.”
