Bringing the Letter of Authority process into the 21st century

Anthony Rafferty is Managing Director for Origo and a Scottish Financial Enterprise Board Member

A comment I’ve heard a lot recently is ‘what would have happened if the COVID-19 lockdown had happened 10 years ago?’ i.e. when we didn’t have the level of digital services, like Amazon and online food shopping – not to mention video conferencing – we have today.

Online delivery services in particular, such as Amazon, have proved a boon throughout lockdown and have served to emphasise the kind of service levels consumers now expect. 

But imagine wanting to order 10 different goods through Amazon and instead of going online and ordering them all in one click of a button, you had to request an application form from each supplier, via Amazon, complete each one, sign the form and send it back in the post. Amazon would then collate the order and send the forms out to each supplier, who would process the form and send out the goods.  

Unbelievably, this is the way that some parts of the financial services industry still operate. Sometimes there is good reason for this – in a world where scamming proliferates – sometimes there’s not. In the latter case, you can further imagine the frustration and incredulity of consumers who have to go through the process.

I have personal experience of this issue having recently instructed a new financial adviser. One of the first things he had to do was contact 11 providers with Letters of Authority, confirming him as my agent and that they should provide him with my information. To do this, he pulled out 11 photocopies of the same form, filled them in by hand and I signed them. He then sent them on to each of the providers.

What became apparent was that there was no consistent way of working within the industry. Some would accept the form faxed across or scanned, some wanted it in the post. Some then came to me directly for confirmation that I had appointed the adviser, some didn’t. Some accepted a digital signature, some didn’t.

And, although the adviser had asked for the same information from every provider what he got back was a set of very different and inconsistent packs of information, which he then had to wade through to find what he wanted.  

The exercise took weeks to complete and was a poor experience for me, for the financial adviser and also for the pension and investment providers.

Origo is Scotland’s oldest Fintech, with 30 years’ experience helping to make the industry more more efficient and cost effective, for providers, intermediaries and end consumers.

We derive great satisfaction from taking a process that has ‘always been done this way’ and both bringing it up-to-date and making it better for the end user.

That is what we are doing with the Letter of Authority process. We brought together 70 different stakeholders in the collaborative approach we are renowned for, to help us digitise the process, securely and in a way that works for everyone.

The new process is currently in beta testing. Now, instead of photocopied paper, the adviser swipes the relevant companies on a screen, which makes a digital request to them all using a consistent set of data standards. They then send back the information digitally and through automatic integration it is uploaded to the adviser’s back-office system. What’s more, the adviser will get back a consistent set of data from every provider.

The Letter of Authority process is carried out across the thousands of advice firms around the country every week. Our new service will make for a far improved experience for all concerned, turning a process that currently can take weeks, into one that takes a few days, or less. As you might imagine, user feedback has been extremely complementary. 

Ironically, as I write this an Amazon delivery has arrived at our door, having ordered it just before 7pm the previous evening. To my mind, if Amazon can deliver that level of customer service, consistently, we can too.

Published: 2 July 2020