Ahead of this, from September 2018, children with CTFs will start to turn 16, giving them the opportunity to assume control of their funds for the first time. However, many of these children won’t even know they have a CTF in their name. Providers also need to consider their communication strategy with regards to the existing Registered Contact on the account – many of whom may have understandable concerns or questions relating to these changes.
Know Your Customer
As awareness of the funds picks up speed we are likely to see an upturn in young adults wanting to engage with their CTF provider, presenting a “Know Your Customer” challenge, especially considering the difficulty in tracing the financial footprint of this age group. There is already a significant issue with ‘gone away’ clients with nearly one million being out of contact.
Under the radar
CTFs have been operating somewhat under the radar since their inception in 2002, due to their relatively low monetary value, which means the sudden influx of enquiries and requests for change could come as a surprise for providers, whose administration teams may be unprepared for and overwhelmed by customers' processing requests.
Digital first demographic
Generation Z has been brought up in an instant communication world, with many 16 year olds having never sent an email, preferring to IM or Chat instead. They expect access to their financial accounts and personal data at any time, and from anywhere. Also they tend to be sceptical of financial services, having witnessed recession and miss-selling within the industry.
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The CTF Opportunity
There are currently six million children with a CTF, with billions of pounds accumulating in these products. It’s a significant market, and one that needs an effective client engagement strategy. Getting the engagement with these customers right, as they come of age, will likely impact on the provider they choose to see them through their financial life cycle.
The CTF Servicing Solution
Whilst the above may look and sound straightforward, the difficulties in finding, engaging, informing and then actioning should not be underestimated. Many providers are unlikely to be able to staff up in time to be able to deliver such a process driven service.
Outsourcing the transition to a digital-first, multi-channel model will help organisations to meet this challenge, and quickly. Outsourcing not only enables providers to scale up their CTF servicing to meet the impending demand, choosing the right partner with experience in this difficult to serve demographic, with help achieve the slick customer journey that Generation Z demands.
Complete portfolio lifecycle management
Target has an effective and scalable solution in place to handle transfers, processing and maturity of Child Trust Funds. Our already proven approach to CTF servicing enables us to respond to customer demand, key lifecycle events and change quickly and efficiently.
Governance and compliance
Enjoy the peace of mind from a dedicated compliance team, helping you to meet regulatory and business requirements around control and oversight.
Comprehensive MI and reporting
Get access to our complete MI suite, for insight and full transparency into the portfolio, ensuring enhanced governance
Experience and expertise
Target has serviced over £4.5bn of investment products for a number of providers, with the systems, processes and expertise to take our proven solution, and develop and deliver tailored servicing for our clients.
Discover Millennials' attitude to lending and how financial services providers should adapt their servicing model