The firm backs the initiative, and called on other pension providers to develop a framework for the necessary consumer research to be carried out during 2016.
Scottish Widow’s independent IGC, in its report today (31 March), asked the provider to carry out a study using an independent third party, covering a representative sample of its customer base.
It is expected the findings will be ready by the middle of the year, and will inform the IGC’s value for money considerations over the next 12 months.
Peter Glancy, Scottish Widows head of industry development, said one of the areas where the Scottish Widows IGC felt information was needed was around actual consumer expectations.
“There is very limited data regarding actual individual members and what they value in their pension scheme and what they would regard as value for money and good outcomes look like for them from their investment in the scheme.
“Our IGC has commissioned an extensive piece of customer research to try to answer some of these questions within our own customer base.
“What they are keen to develop with the other IGCs, or indeed if industry would be willing to come together, is an independent piece of research which then puts each company against the findings to create a benchmark. This would then aid comparison across the market when measuring each company against actual customers’ expectations of value for money.”
Elsewhere, the committee’s report stated that peaks in charges for customers saving in legacy products are capped at 1 per cent of their fund in any given year, reducing the average charge below 1 per cent for the policy term in many cases, while all exit charges are being removed.
Additionally, the provider agreed to communicate with customers with older products, bringing to their attention the availability of more modern products, whilst reminding customers of the value of some of the benefits only available in those older products.
Finally, an alternative to cash investments, which were producing low re
I hope there will now be some movement and agreement towards achieving this quickly Daren O’Brien Babloo Ramamurthy, the independent chair of the Scottish Widows’ IGC, said: “We believe Scottish Widows offers reasonable value for money relative to the market and is making what we believe are sensible efforts to continue to improve value for money in the future.
“We are comfortable Scottish Widows has designed investment options which are appropriate for its customers and has aligned its interests with those of its customers through its charging structure.”
Ronnie Taylor, pensions director at Scottish Widows, pointed out that they established an IGC well in advance of government legislation, so were already well placed to meet the challenges it set us. “We are particularly supportive of the creation of an industry-wide customer benchmarking of providers which will give insight into what customers consider to be fair value.”
Daren O’Brien, director at London-based Aurora Financial Solutions said: “IFA’s have been asking for insurance companies to make their charging structures simpler and also standardised across the industry, so that it is easier for clients to truly compare them.
“Now that a large insurer is also asking for this, I hope there will now be some movement and agreement towards achieving this quickly.”
ruth.gillbe@ft.com
