Personal Pension  

Time is ticking for closed-book providers

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With pension freedoms comes responsibility

2. Stepping beyond simply adhering with compliance, to ensure good outcomes for their customers. An example of good practice which helps us understand what the regulator is looking for is stated as: “establishment of a framework to identify unusual customer behaviour patterns which could indicate potential product-related issues.” (page 26)

3. Opening of communication channels to get customer feedback

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4. Communicating consistently and regularly with customers and presenting enough information in a “clear, fair and not misleading way to enable then to make informed decisions about their policies.”

5. Tackling up to 22 per cent incidence of ‘gone-always’ where providers are simply unable to locate customers to send them any information.

However, since the time when many of these closed-book policies were set up, email communications have become ubiquitous as have social media communications, online shopping, banking and much more besides. This makes it a great deal easier to track people down and put messages in front of them.

Most of us interact with our home and business suppliers online already. We have got used to going to multiple online portals to view and pay bills, research product options, track our parcels, and much more. The time is surely ripe to start tracking our retirement savings progress online. The good news is that cost-effective technology is now available to extract data from even the most aged of IT systems supporting legacy books, and present it in an easily digestible graphical format.

This data can be ‘mined’ by providers to uncover customers that are vulnerable to not reaching declared retirement savings targets, for example. This intelligence could then be used to send tailored alerts to customers via email or push notifications from a secure portal. Informative, efficient and highly visual portals can be built in quick sticks.

This might sound a million miles away from where much of the industry is today but they will have to go there anyway if the thrust of the FCA’s declared vision makes it through into regulation. If there was any doubt at all about the online direction of travel of the retirement space, the Pensions Dashboard, now mandated for delivery by 2019, puts it to bed once and for all.

There is an undeniable and increasing consumer expectation that providers should be able to give them a secure online view of their pension assets, showing them where their assets are, how they are performing against target, and what projected funds might deliver them at stated retirement age. This expectation has undoubtedly been fuelled by the growing success of D2C platforms.

The fact that alternative retirement savings vehicles are emerging over and above the highly successful auto-enrolment workplace pensions in the shape of the Lifetime Isa makes the pensions dashboard and policy specific portals all the more important if consumers are to get to grips with their real retirement saving status, work out if they need to be putting in more and make contribution and investment-type adjustments on the fly.