A recent poll from financial services technology company Avelo suggests the Treasury’s move has been cautiously welcomed by advisers, with a quarter (25%) saying simplified products are great news and long overdue, whilst almost half (43%) said they have a role but it’s not quite clear what that is yet.
Only 15% said simplified products were an unnecessary step.
When asked how the introduction of simplified products would impact on their business responses were split with one third (29%) saying it would have no impact, whilst a quarter (26%) said it would help them deliver better service to clients.
Against this, though were a quarter (26%) who believe that simplified products will result in increased complexity as well as costs, whilst one in five (19%) forecast that some of their core business will ultimately be served by others.
Most advisers (91%) agree that financial services is currently too complex and recognise the need to make financial services simpler, with three in five (60%) believing that the biggest issue is with regard to the mass market, with limited access to professional advice, which will only be exacerbated by RDR. Only one in 10 (9%) believe that the industry is clear enough for consumers.
Paul Yates, strategy and product development director, Avelo commented: “The introduction of simplified products to reduce complexity within financial services and encourage greater understanding and product take up in the mass market is long overdue.
“The devil, though, will be in the detail – the key challenge for our industry is ensuring that these products really meet the needs of consumers whilst generating enough value for those selling or advising and those manufacturing.”
The newly formed steering group on simplified products will look into how to bring simple products to market, including how simple products should be structured and marketed to ensure consumers get the most appropriate deal.
Yates concluded: “Cost to serve and risk associated with the sale of these products will be key and effective use of technology will be paramount.”
