Simplicity must define products of the future – new report
30 October 2014
As the advice industry grapples with changes to sectors such as retirement income and the provision of care, a new report authored by industry experts and the Association of Professional Financial Advisers (APFA) is calling for simplicity to drive the development of the products of the future.
The new report, sponsored by Fidelity and published as part of a series to celebrate APFA’s 15th anniversary, features a number of guest articles exploring what the next few years hold for product development in financial services. It focuses on a number of critical product areas including pensions, protection and funding long-term care.
Chris Hannant, Director General of APFA, said:
“Changes to the regulatory landscape and to the way consumers access advice are driving innovation and the development of new products. But a crucial consideration for the products of the future must be simplicity. There is a desire among the industry and consumers for products which are easy to understand and easy to track. Language also needs to be simple, so that better conversations between advisers and customers can take place.
“These are exciting times for financial services, and the last thing we need to see is unnecessary complexity which has blighted us previously.”
One key area covered in the new report is the changes to the pensions market, and the introduction of auto-enrolment. It suggests that the development of pensions products will need to react to the success of the scheme among savers in order to be a success.
Alan Higham, Retirement Director at Fidelity Worldwide Investment, said:
“The recent changes to defined contribution pensions are the biggest since the regime was introduced in 1921. But what could this mean for products? Looking ahead, the crucial issue here is whether auto enrolment works, and people embrace the need to save more.
“If they do, then from a product perspective we may see no more than tinkering. Alternately if opt out rates rise then we could see soft compulsion graduate to compulsion with knock-on effects for products, taxation and allowances for retirement savers.”
The full report is available at http://bit.ly/1wIBn9O.
ENDS
