Robo-advice  

L&G mulls offering robo-advice

L&G mulls offering robo-advice

Legal & General (L&G) is considering whether to start offering robo-advice as the firm overhauls the way it engages with its customers.

L&G’s managing director for individual annuities, Emma Byron, said the provider did not have firm plans at this stage but did not exclude venturing into robo-advice as it recognised there was a consumer need.

Other options may include partnerships with other providers of advice, she said.

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Ms Byron said: "[Robo-advice] is not off the table. We support the need to get people advice. We are always looking for ways to enhance our service."

The provider, which sells its products via intermediaries as well as direct to consumers, is currently revisiting its client literature with a view to simplifying the language used.

L&G recently overhauled its direct annuity product, stripping out complex features that had found little take-up among clients, such as certain tiers of spouse benefits.

But more was needed in the way of innovation, particularly around consumer engagement, Ms Byron said.

Although she added this was not going to come from new products, as called for by the regulator and government in the past.

She said: "We definitely need to innovate in how we engage with people because this is where we have failed.

"Sitting in an insurance company in the ivory tower dreaming up new products is not what customers want. Simplification is [what is] important.

"The FCA is focusing on getting good outcomes for consumers. Have they articulated the solution perfectly for that? Probably not."

The Association of British Insurers (ABI) came up with a five-point plan in April, aimed at engaging consumers with their retirement options far earlier in their life than is currently the case.

The trade body said it was concerned more than half of fully withdrawn pension pots were not spent, but were moved into other savings and investments instead.

The plan includes tailored and phased customer communications throughout a saver's life; a mid-life MOT; prompts for people to use guidance; overhauling retirement risk warnings; and improving in-retirement communications.

The ABI called on the government, regulators, guidance providers, the advice community and consumer bodies to work together to make the interventions a reality.

But other providers recently said the retirement industry needed to take more pride in what it has already achieved.

Speaking at an ABI conference in April Aviva's head of savings and retirement, Alistair McQueen, said there have been a number of big innovations in the marketplace, such as automatic enrolment and pension freedoms so the industry had no reason to be apologetic about not innovating enough.

Despite this, he said Aviva was acutely aware of pressure from the outside from the likes of big tech firms and start ups looking to engage with retirement customers and was gearing up for its next innovation drive as a means of 'self preservation'.