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Engage with planning: a guide to Letters of Authority

We thought it might be useful to pull together some guides explaining how we work with clients, what the actual process is and to give you a heads-up on what you might want to do before you begin to engage with us or any other financial planner.

Session 1: Let’s talk LOAs

Letters of Authority (LOAs): exciting stuff I hear you say, tell me more! A Letter of Authority (LOA) is a legal document that allows customers to authorise someone (us/financial practice) to act on their behalf within agreed limits. Simply, we get you to sign a letter that explains we need access to all the information on your current plans.

Why do we need information?

In any planning scenario it’s important to understand where you are now, look to where you want to be and work out where the gaps are. For example, you have five existing pensions that you have built up over many years, you want to retire early but you have no clue what these pensions are about and what they will do for you. Can they help you travel the world and still give you a lifetime income? 

For us to break down your situation and start to build a plan, having accurate information is important in understanding what you have already, reflecting on nuances in the plan that could help or hinder you, and then providing you with the knowledge of how each plan impacts your future. We like to empower you to have the confidence to make good decisions. Giving you all the tools to do so in the form of accurate information is vital.

Straight forward, right?! It really should be - in a world where developments in communication have been accelerated due to Covid, obtaining accurate information should be easy but in fact, it’s the part of our process that tends to take the longest! 

It can be a guessing game as to the best address to send the letter; the process is inconsistent, with different companies having different methods of accessing your own information! There is still a need for a wet signature in most cases, and sometimes the process just gets going but then stops as we’re told we’re dealing with the wrong department!

How does this impact our advice?

Firstly, I should explain this is an industry thing -  it’s certainly not just Jacksons that endure this frustration. I should also say that not every provider is the same, some have really streamlined their approach.

Laying the foundation of our relationship with you should take time. We might be talking a multi-decade partnership, so those foundations need to be pretty solid!

When we start to onboard you with Jacksons, realistically we now need to consider a 12 -16-week process because we have to account for the time it takes to gather information on your existing plans. An LOA can take companies between 10 days and a couple of months to deliver an acceptable response.

Sometimes, an LOA only lasts for six months so if it expires, we may have to apply again. Don’t be surprised if we have to ask you to sign another LOA anytime we want to have another look at your plans together!

You might be asking the same question we ask ourselves daily: surely there is a way of delivering this information in a standardised way? There are a couple of companies out there starting to build this process but they seem to be struggling to gain traction. What we need is a standard agreed by planners and providers, much like the introduction in 2013 of the Current Account Switching Service, a standard and a time limit was introduced, and it works! 

Until then, we continue with the current LOA process, but despite it being arduous, it is worth it. If you are paying us or any financial planner to work with you to create goals, test ideas and plan a path, isn’t it better to put the work in now and find out exactly what you have and maybe more importantly why?

How could you get a head start?

If you think you are ready to pick up the phone to see if we are a good fit for you, consider doing the following at the same time for all of your existing products and providers:

  1. Make sure they have your current address
  2. If you have married, entered into a civil partnership or changed your name, let them know
  3. Ask for an up-to-date statement
  4. Find out your policy reference number. (This should be quoted on any statement you have)
  5. Check they have your correct date of birth and National Insurance number
  6. Find out if there is a specific address they like to give for information enquiries
  7. Do you know if the company has been taken over or changed its name?

None of us enjoy life admin, but I promise it will make you feel all together and efficient about your life for a minute.

Whether you engage with us, another planner or you’re just looking to have some control over your financial journey, you won’t regret becoming a bit more organised.

Knowing what you have and what it’s going to do for you could make all the difference!

Sharon Bray