Time, effort, expense and a few grey hairs go into changing software systems. Key decisions will need to be made on integration with other company systems or external online tools. Is the existing software to be scrapped or will it continue to be supported for legacy business, or will running two systems be inefficient and costly in the longer term? Timing is key to ensure that business continues if one system is permanently switched off. Will there be dual running of the systems? How thorough is the testing and training for staff?
Decisions will be taken on the data held on the old system and how much is moved across. If not all data is transferred, how this decision was reached and how data can be accessed is important; inevitably somebody will need to use it, and probably in a short timeframe. Often a big issue is whether the data is clean in the existing system or has the flexibility in the data fields allowed for inconsistencies and irregularities which have perhaps been known but not addressed in the past. Will the unique client reference change, have pensions reviews been completed, are there any crossover issues, will adviser charges still be facilitated, will real-time information be affected and will service suffer due to training or lack of staff experience?
There are many issues which will have been questioned, discussed and debated at length. Advisers need to understand the reasons for the change and are reassured that it is business as usual for them and clients. Any change should have a positive impact on the firm, not only to service the adviser and meet the regulatory demands but to enable the business to grow robustly in the future and meet the shareholders’ expectations.
Being robust
Whatever back office system is used, Sipp operators need to help advisers understand their systems are robust and regularly serviced and that risks are managed and controlled. The FCA has focused on poorly run Sipp operators and it is now time for the competent operators to step forward.
The final notice served to Kevin Wells of Montpelier Pension Administration Services by the FCA must be the catalyst for Sipp operators to improve where they need to or take the brave decision to change systems. For advisers it is a warning they must start to look more closely at back office systems before making their Sipp recommendation. The FCA must realise there is a potentially serious crash pending far bigger than some of the other Sipp issues on its radar if administration is ignored.
Julia Bassett is chief executive at Barnett Waddingham Sipp
