Pilot Proves Open-Standards Tech Can Speed Up Letters of Authority
A successful pilot by fintech Pension Lab has shown that the open-standards technology already used to accelerate pension and ISA transfers can also transform the slow, manual process of validating Letters of Authority (LoAs). The firm says providers do not need to build new systems or join another network – they can extend existing infrastructure that already handles millions of transfers.
Open-standards transfer technology is currently in use at more than 150 financial institutions. The pilot employed ‘Discovery Messages’ – a capability unique to that framework – to check LoA requests against provider records, instantly validate or reject them, and, where systems are integrated, return selected information within seconds. This is a stark contrast to today’s LoA journey, where requests arrive through multiple inboxes in varied formats, requiring teams to manually route, verify and compile responses – sometimes over several weeks.
Scott Phillips, CEO and founder of Pension Lab, pointed out the irony that the same transfer journey can be completed in 6 to 10 days using open standards, yet the LoA that often starts the process remains a frustrating bottleneck. “Our pilot has shown that the Discovery Messages used in open-standards transfers can help tackle the LoA challenge without providers needing to rebuild or replace existing systems,” he said.
The fintech is now actively calling on pension providers, platforms, wealth managers and technology firms to extend their existing open-standards transfer capabilities to LoAs. Because the underlying infrastructure is already widely adopted, the proposal sidesteps the cost and complexity of launching a proprietary industry utility.
What the Faster LoA Validation Means for Financial Firms and Their Clients
The LoA Bottleneck That Slows Down Clients and Eats Into Adviser Time
Letters of Authority are the essential first step in most advice and transfer journeys, granting permission for a firm to gather information about a client’s policies. Yet they remain one of the most administratively cumbersome processes in UK financial services. Requests land in generic email inboxes, often incomplete or mislabelled, forcing back-office teams to sift, validate and chase before any meaningful work can begin. That delay, in turn, stalls investment decisions, pension switches and consolidation projects for consumers.
Why Open Standards Offer a Proven, Scalable Fix
The pilot leverage sits squarely on an existing, interoperable rail: the same open-standards tech that already meets service-level commitments to respond to transfer Discovery Messages within two business days. Where providers have integrated their back-end systems, the response can be near-instant. Because this is not a new network but an extension of what many firms already use, the implementation path is significantly shorter and cheaper than building a dedicated LoA platform. “Open standards already do the heavy lifting in transfers,” noted Howard Finnegan of Equisoft, a backer of the approach, “and demand is growing as the industry looks for scalable answers to challenges such as small pots and master trust transfers.”
Competitive and Consumer-Duty Implications
For advisers, a faster, digital LoA process means fewer follow-ups, clearer tracking of what information is still missing, and a dramatically quicker path to advice. That in turn reduces the risk of clients cooling off or switching adviser due to process delays. For providers, early adoption could become a competitive differentiator: advisers may favour firms that return validated LoA data in seconds over those that take days or weeks. Under the FCA’s Consumer Duty, any step that removes unnecessary delays and manual friction also helps demonstrate good outcomes. Providers that drag their feet risk not only operational inefficiency but reputational strain from advisers who increasingly expect the same digital speed they see in transfers.
How Providers and Advisers Can Turn This Capability Into Quick Wins
The pilot’s findings suggest a clear, low-friction path for firms that want to improve their LoA handling. Specific steps that follow directly from the discovery include:
- Extend existing transfer infrastructure, don’t rebuild. If your firm already uses open-standards technology for pension or ISA transfers, ask your tech team or vendor to activate Discovery Message functionality for inbound LoA requests. The core technical layer is already in place.
- Consolidate LoA intake channels. Moving away from scattered email inboxes toward a single structured digital channel reduces the risk of lost or misrouted requests and speeds up initial validation.
- Set service-level targets for LoA validation. Use the open-standards benchmark of two business days for Discovery responses as an internal target, and aim for seconds or minutes where back-end integration allows, giving your adviser partners a clear expectation they can relay to clients.
- Advisers should ask about digital LoA handling. When selecting platforms or providers, enquire whether they already apply Discovery Message technology to LoAs. Firms that do can meaningfully shorten your administration cycle and cut the volume of follow-up emails your team must send.
Risk & Opportunity Assessment
| Commercial Risk | Medium | Providers that do not adopt a faster LoA process risk losing efficiency gains and incurring higher manual-processing costs relative to peers; however, this does not immediately threaten revenue unless advisers begin to steer clients elsewhere. |
| Competitive Risk | Medium | Early adopters of instant LoA validation may gain a first-mover advantage with intermediaries, as advisers are likely to favour firms that reduce their administrative burden and speed up the advice journey. |
| Regulatory Risk | Low | No new regulation is proposed. However, the FCA’s Consumer Duty expectations around avoiding foreseeable harm and enabling good customer outcomes are directly supported by faster, less error-prone administration, so not acting could draw soft regulatory scrutiny over time. |
| Reputation Risk | Medium | Firms perceived as slow to modernise basic administrative processes risk being seen as legacy providers by the adviser community, especially when an open-standards solution is already in use for transfers. |
| Technology Disruption | Low | The proposed solution is an incremental extension of an already widely deployed, interoperable infrastructure rather than a disruptive new platform. The risk of technological displacement is therefore minimal. |
| Commercial Opportunity | High | Extending existing transfer tech to LoAs can sharply cut manual processing costs, reduce adviser churn and improve the consumer experience – a tangible commercial upside for providers that move quickly. |
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