The Pension Lab's White Paper on LoA

Welcome to The Pension Lab's White Paper: "What Lies Beneath Letters of Authority"

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Unveiling the Hidden Volumes and Costs of the Letter of Authority (LoA) Process

We’re shining a much-needed spotlight on a critical but often disregarded process: the Letter of Authority (LoA). In our latest white paper, What Lies Beneath, we expose the staggering £442 million cost impact caused by the annual volume of 3.9 million LoAs.


Understanding the LoA: A Vital Administrative Tool

The LoA serves as both a legal instrument and a procedural gateway, it grants authorisation for third parties - be they advisers or pension firms - to access and manage an individual's financial polices such as pensions. However, despite its fundamental role, the LoA process has long been mired in outdated procedures and inefficiencies.


The Toll of Inefficiency: £442 Million Wasted Annually

Our research reveals a stark reality: the LoA process exacts a heavy toll on both time and resources. With a staggering 3.9 million LoAs ensnared in outdated bureaucracy, consumers endure a collective drain of 8 million working hours annually. This translates to a staggering cost of £442 million each year - a burden ultimately shouldered by the consumer seeking financial guidance and security.


Consumer Harm and Regulatory Non-Compliance

Beyond the monetary cost, the LoA's inefficiencies inflict tangible harm on consumers. Delays in processing LoAs not only prolong the transfer of pensions but also contravene the Financial Conduct Authority's (FCA) Consumer Duty rules. By impeding consumers' ability to pursue their financial objectives in a timely manner, these delays represent a breach of regulatory obligations and erode trust in the financial system.


A Call for Reform: Embracing Innovation and Collaboration

Our white paper, which forms part of the #LogYourLoAPain campaign, does more than just expose the flaws of the LoA process - it offers a roadmap for reform. By embracing technological innovation and industry-wide collaboration, we can streamline the LoA process, improve security, mitigate delays, reduce cost, and enhance the overall consumer experience. Together, we can uphold our duty of care to consumers and build a more efficient and transparent LoA and overall financial experience.

Join us in our mission to transform the LoA process and empower consumers to achieve their financial goals with confidence.


For more insights and recommendations, explore the full white paper, What Lies Beneath Letters of Authority