Master Trust Authorisation: the clock is ticking…
01 Oct 2018 - Estimated reading time: 3 minutes
So here we are, the clock is now ticking. It’s the 1st October and we’re no longer under starter's orders…the Master Trust Authorisation six month window is open and TPR is ready and waiting for those applications. Existing Master Trusts have until 31st March to file their Authorisation applications; those that don’t pass, or decide not to submit, must exit the market.
We’ve already heard from TPR that a quarter of the market won’t be trying and I wouldn’t be surprised to see at least another quarter exiting by the time the window closes.
Authorisation is no mean feat. I’m right in the belly of submissions and seeing it for myself; it’s immense and quite rightly so. And it’s time critical. Those with the Master Trust Assurance Framework (MAF) badge are starting from a better position than those without, but think of this as an elevated version of MAF with bells, whistles and knobs on.
The message from TPR to applicants has been loud and clear – don’t be the first to fail and take time to get the submission spot on.
Looking ahead, it’s pretty interesting to think about the market might look like twelve months from now - survival of the fittest and most committed, who might ship out ahead of the new authorisation regime and who might try but not make it. It doesn’t take much crystal ball gazing to see that the consolidation already happening will gain pace. It’s absolutely key to ensure that individuals are protected at all times and it’s also important to avoid chaotic market exits which may dilute confidence in the Master Trust brand. What we’ve seen so far has been controlled and measured, which is exactly how it should be.
A survey recently said that the right number of Master Trust providers is no more than 10*. I’d say it’s not about how many, that it’s more about ensuring that prevailing Master Trusts are well governed, financially robust, offer a rich experience for members and provide very best value for money.
With few exceptions, the market is pretty vanilla right now so there still is opportunity for new entrants – disruptors and pioneers with a well thought out road map, an understanding of exactly who their customer is and a clear focus on how best to meet their needs. And all the better if they’re not at the mercy of a legacy that makes them less agile.
Despite the possible uncertainty that the Authorisation application process may bring, it doesn’t appear to have dampened activity and dialogue. It’s even more critical, however, for employers and trustees considering a Master Trust to carefully consider who their most suitable provider partner may be. Those already using a Master Trust should absolutely be asking questions of their provider and getting clear, detailed answers on how the Authorisation submission is faring and timelines for completion.
Getting the right support and advice is paramount; it’s important that the advice is truly independent and without conflict and is backed by a track record of market knowledge, experience and expertise.