Scottish Widows  

Provider caves to client pressure on pension transparency

Provider caves to client pressure on pension transparency

Scottish Widows has backtracked on removing a function that allows clients to see what underlying funds their pension scheme is invested in.

The provider had removed the function in an update to its pension investment portal after several clients told it this level of information was not needed.

But FTAdviser understands it has now re-instated the it after receiving several complaints from clients who valued the information.

Scottish Widows said work was currently underway to add the feature back in, with the functionality expected to be live in mid-October.

In email correspondence with a client, seen by FTAdviser, Scottish Widows said: “As part of developing the new pension investment approach (PIA) switching journey we undertook detailed customer testing. 

“The clear feedback was that seeing the underlying funds in the PIA was not information that most customers wanted or needed to see. In the interest of keeping the journey as simple as possible we decided to remove this.

“Since PIA fund switching was launched we have seen very positive engagement from customers but it has highlighted that some customers would still like to see the individual funds that their PIA invests in. 

“The development team have quickly picked this up and work is underway to add this back in. We are aiming for mid-October to have this functionality live again.”

Scottish Widows' pension investment portfolios invest in a range of underlying equity and corporate bond funds.

These were updated in 2015 to reflect the pension freedoms rules introduced that year, which involved introducing new investment options in the five years prior to retirement, depending on whether the client intends to take cash, buy an annuity or remain invested into retirement.

The funds that consumers’ pensions are invested in are based on risk levels and as they approach retirement, their pension will be moved into funds which have a lower level of risk to help protect their value.

Based on customer feedback, Scottish Widows recently made changes to how information about the pension investment approach is displayed online.

These changes included explaining the pension investment approach and what options clients have to take more control over how they are invested.

A Scottish Widows spokesperson said: “We made a number of changes to how we display customers’ pension investment approach to offer more information and make it easier for them to take better control of their investments. 

“We made these changes following positive feedback during customer testing and we continue to tweak the display as we receive any additional comments.”

Alan Chan, director and chartered financial planner at IFS Wealth & Pensions, said: "It s best to engage with clients to see exactly what they want to see and don't want to see as this will now cost Scottish Widows time and money to rectify.

"I think that it is the right move to bring back information on the underlying funds and this encourages transparency and for clients to be more engaged with their pension. Also any fund information is fundamental."