Providers need to collaborate to simplify the customer journey in light of the new ‘guidance guarantee’ and work together to define a simple, standard way of presenting information about customers’ pension pots, Altus Consulting said.
The firm warned against mandating the collection of customer information as part of the new guidance guarantee, instead recommending that a standard form of information about members’ defined contribution pension arrangement should be made available to consumers online.
This information can then be passed to the guidance delivery partner, likely to be the Money Advice Service or the Pensions Advisory Service, in advance of their guidance consultation.
The Financial Conduct Authority has recommended that the guidance provider asks consumers for a large quantity of information about their pension arrangements, personal circumstances and financial objectives with the release of consultation paper CP14-11.
According to Altus, the average consumer will have had around 11 different employments in their lifetime and “therefore collating this information about a potentially high number of pension arrangements during a guidance session would leave little time for the delivery of actual consumer guidance”.
Instead, Altus suggested that collecting information electronically in advance of the guidance session would be the key to addressing this problem.
Jon Dean, senior consultant at Altus, said:“The Pensions Advisory Service have told us knowing about the consumer’s situation really helps offer appropriate guidance but for some customers, being asked for these details will put them off taking up the offer of guidance.
“In many cases, people don’t remember what they have got and it is part of the conversation that they have with them to find lost pensions.
“We believe there is a role for providers here to work together to define a simple, standard way of presenting information about their customers’ pension pots.
“A statement showing the pot size, any guarantees and other relevant special features, would give the guidance provider and customer alike a useful summary of total benefits. Ideally there would also be a means of submitting this information to the guidance service electronically.”