The Digital SIPP Q&A

Gavin Hughes, Head of Proposition Delivery at M&G Wealth, explains our new fully online retirement-planning solution makes life easier for advisers and clients

In a nutshell, what is the digital SIPP?

Our digital SIPP is an end-to-end digital pension application solution where everything is online – both for clients in accumulation and decumulation.

Essentially, we want advisers to be able to set up the right solutions for their clients on platform as quickly and easily as possible. At the same time, we capture all of the data we need in order to service their clients’ future needs as efficiently as we can.

What features does it include?

• electronic signatures using DocuSign
• straight-through processing
• a high level of online integration.

So whether you’re setting up a new SIPP for a client, transferring in pensions from other providers or requesting income drawdown, the whole process can (apart from a few instances) be done online.

This offers a massive time-saving, a reduction in paperwork (which is also great for the environment) and far less potential error, as client bank details, ID validation and anti-money laundering (AML) checks are being supplied and validated upfront.

Looking ahead, it means it will also be faster and simpler to set up other products and wrappers on behalf of a client.   To complement our digital SIPP changes we have also introduced electronic signatures to our existing digital ISA/GIA and third-party product applications and will look to make further improvements to digital applications later this year.

How are AML and ID validation checks being conducted digitally?

We’ve introduced automated AML and IDV checking including automated bank account verification, which is provided by TransUnion. So essentially, once we have all customer identity information including a client’s bank details, we can run all the AML and ID checks we need and have them on the system for all future processing for that client.

How does the digital SIPP help with pension consolidation?

We very much see the digital SIPP as a key solution for advisers with clients seeking to consolidate all their pensions in preparation for income drawdown.

We’ve therefore integrated with the two leading pension transfer services Origo and ATG. This allows us to automate both cash and in-specie transfers, which will be a huge benefit for clients who don’t want to be ‘out of the market’. Plus asking customers to use DocuSign to authorise the transfer means there’s no waiting around for paper applications or transfer forms, in order to go ahead.

The upshot is that the time to transfer in pensions should fall significantly. Our tests show transfer times fall to a few business days once the process is fully digital. Obviously, the time taken will depend heavily on the set-up of the individual provider.

Can advisers track the status of pension transfers?

Yes. M&G Wealth Platform’s integration with Salesforce’s cloud-based CRM system, means the application process can be tracked in real time, with automated status updates. Plus if anything is held up – say an AML check fails – a case is automatically created in Salesforce so action can be taken right away.

We know that transferring a pension can be stressful because there are stages where the client may feel they simply don’t know where their money is. By enabling the process to take a few days or even hours, the more open they should be to consolidation and the more they can be reassured. Plus of course, the efficiencies and time-savings for advice firms can be transformative.

Is there any new functionality on the digital SIPP?

Yes – we’ve introduced dripfeed drawdown, which means customers can specify what regular income they want to receive from their SIPP, and that will be paid into their nominated bank account automatically. We also offer maximum flexibility on our pension payment dates, with investors able to choose any day from the 1^st to 28^th of the month.

For advisers, we’ve also introduced a fresh, more intuitive landing page and dashboard, which makes for easier navigation and allows planners to start, save and resume applications easily. In terms of investment,  the already extensive range of fund choices  includes smoothed funds. 

Are there any other ways in which the digital SIPP supports drawdown?

Alongside the income flexibility mentioned above, the system will calculate the tax-free sum available. The client can choose to take that all at once or gradually over time. The system provides notifications when income is paid out, plus we already have a strong client reporting proposition. So adviser and client can keep on top of all drawdown activity and know exactly where they are in terms of money taken out, current investment exposure and the current value of their pension pot.

Are there any other SIPP features advisers can look forward to?

Yes –we’re working to integrate our pension illustration tool so when an adviser inputs client data onto the platform, it will feed into both the application AND illustration process with no need to rekey. There will be a fully online ‘quote and apply’ process, making the whole journey flow very easily.

And we will deliver further iterative change as the SIPP gets used in the real world and we get more feedback from advisers.

Rollout has been phased what’s feedback been like?

It’s been very positive. We were keen to test what we’ve have built and respond quickly to feedback.

Some feedback has been around the level of client data we need to capture in order to set up new business – so we are assessing that.  It’s important to stress that having a customer’s relevant information, right at the outset will allow us to meet their needs much more efficiently in the future – including when they want to take money off the platform.  Firms involved in the pilot said that reviewing their processes to capture key information early in discussions with the client helped considerably.

And do you want advisers to keep telling you what they think of the digital SIPP?

Absolutely. We are very keen to hear about advisers’ experience. Developing functionality such as the digital SIPP is a two-way street so we want to listen to advisers in order to get it right.

In this way, we can be confident we’re building solutions that really do make financial-planning easier for everyone.