JP Morgan and Prudential have warned that the debate over the cost of investment and pension products is discouraging people from long-term saving.
Speaking at the Lansons Communications Future of Financial Services conference in London last week, Prudential UK and Europe deputy chief executive Barry O’Dwyer said transparency is key but warned about the negative effects of a public debate.
O’Dwyer said: “It is not a fruitful debate and it puts people off savings products.
“We need an international comparison of charges and in some cases the UK stacks up well, such as on pension administration, but not in other cases.
“The solution is to make sure everything is disclosed so the consumer knows the total charge they are paying and do not find out anything later.”
JP Morgan head of UK retail Jasper Berens said the industry is “obsessed” with charges but consumers do not base investment decisions on them. But Berens says the consequence of more transparency and a debate on charges will be lower costs.
Chelsea Financial Services managing director Darius McDermott says: “If we scaremonger too much there could be a detrimental effect on saving. The most important thing is to have some positivity as we need to encourage long-term saving.