Q&A: ABI’s Stephen Gay

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There isn’t an inconsistency between acting in the interests of your members and focusing on the needs of customers.It’s a false dichotomy to suggest that the two things are conflicting.

Have we got some members who find things more difficult than others? Of course. But what we haven’t got is any members who are opposed to the idea that the industry should be changing and doing so proactively.

Long-term shareholder value can only be created out of having satisfied customers. Those satisfied customers need to understand that your business is to deliver what is in their best interests.

Auto-enrolment is the biggest change in personal finance for a generation. Not just in terms of outcomes but also in thinking. It’s about moving away from the idea that information is king to the idea that we have to understand the way people actually behave in practice.

We have got this massive problem of an ageing population. A third of teenagers now will live to be a hundred, we’ve got actuaries modelling out to the age of 125 and a sixth of people over the age of 80 will get dementia. These are all big problems.

The culture of deferred gratification has been lost. It has been completely lost for even short-term objectives. So to expect people to defer their gratification for long-term retirement needs is a real challenge.

Failing to do something that allows consumers to get the best outcome is almost the same as encouraging them to do the wrong thing. We’ve got to go the extra mile to demonstrate the choices so we don’t pave an easy path to doing the wrong thing by default.

The regulator didn’t ban commission on protection products for very good reasons. In the context of its time, what it did was right. But it’s something we will need to monitor as time goes on.

Advice is an extraordinarily powerful and important service and one that we staunchly advocate. However, it does cost money and that cost must be transparent.

I’m one of the few people who can remember where I was when I read Callum McCarthy’s speech, which kicked off the RDR. I was on a train in Euston station. I read it three times over, I sensed it was going to be very important.

I think the RDR will be seen to be a good thing, although even good things can have some adverse consequences. It has increased the standards, the quality of advice, but it is going to make advice less available than it was.