Aegon welcomes the forward looking focus of the FCA’s report and urges it to resist hard-wiring consumer protection regulation ahead of clarity on how customers will actually behave after April
Rather than focusing solely on retirement income decisions, more must be done to engage people early with their pension and to ensure they have a clear plan to generate the income they need to be ready for retirement
Virtual aggregation along the lines of the pensions dashboard would be hugely useful in helping people understand and engage with their total savings, including state pension. Providers who are in regular contact with customers are best placed to encourage them to engage, and should be at the heart of its delivery
Commenting on the interim report Steven Cameron, Aegon’s Regulatory Strategy Director said:
‘We are pleased the FCA has resisted regulating to solve issues of the past when the future post April will be so fundamentally different. With customer behaviour beyond April impossible to predict, we strongly support the FCA deferring final regulations until they can be designed to protect customers in a ‘real’ as opposed to ‘imagined’ future world. Any regulations put in place before April may well need revisited.
‘We believe digital engagement will become the default for financial services customers. This offers up many powerful ways of improving customer outcomes. Remedies should be designed first for a digital world and then where necessary adapted for other engagement routes.
‘One of the weaknesses in the current market results from information overkill. In all future remedies, we must avoid adding to the length of any particular communication, or to increasing unnecessarily the number of different communications. Digital again offers step change solutions here.
‘While the Market Study focusses on the retirement income market, we are keen that this is considered alongside how to engage customers earlier with retirement planning. The single biggest issue for many customers is that they reach retirement and find they
haven’t saved enough, so their options are limited.
‘We support innovative ways of allowing the market to offer virtual aggregation of an individual’s retirement savings. Rather than developing a monolithic state-run central database, we’d encourage innovative thinking around an infrastructure that would allow individual providers to draw together a customer’s retirement savings – including their state pension. Providers can then innovate to make this truly engaging.’
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