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Plans to develop simple products unveiled


A group of representatives from industry bodies including the Association of British Insurers, the Money Advice Service and Which? have put forward recommendations to launch a range of simple financial products.

In October, the Treasury created a steering group to develop a range of simple products, headed by former FSA director and Lloyds Banking Group chief risk officer Carol Sergeant.

The group was asked to report back to Treasury financial secretary Mark Hoban by July.

In its interim report, published today, the group has proposed a template for an easy access savings account, a 30-day notice account and simple life cover. It is also consulting on developing a simple income replacement product for those who have lost their income due to sickness.

The simple savings products would require a minimum deposit of £1, with no charges for the day-to-day running of the accounts. There would also be no introductory bonuses or tiered rates.

Simple life cover would be provided on the simple concept of “you die, we pay” without additional features such as joint life, indexation or waiver of premium.

The group plans to set up an accreditation body to ensure that these products meet core standards outlined by the group and an accompanying kite mark badge to ensure the products are clearly identifiable to consumers.

The full set of initial recommendations set out in the report is now open for consultation, ahead of publication of the final report in February.

The group says its simple products proposals have been designed to be offered on a non-advised basis. It suggests awareness of simple products could be raised through channels such as the MAS, providers, the workplace and social media. The group says IFAs could also play a role in distributing simple products.

The report has identified a target market of 29.4m adults for simple savings products, and 19.8m adults for simple life cover.

Hoban (pictured) says: “The Government is committed to putting the consumer back at the heart of the financial system, but we understand that restoring public trust in financial products is not an easy task at the moment.

“Simple financial products offer a unique opportunity to demonstrate that products can both be easy to understand and meet customers’ most important financial needs.”

Equity Partners UK managing director Kevin Tooze says: “Simple savings accounts are already out there, and as for life cover this is a product that should really be advised because consumers need to know about whether it should be taken out on a joint life basis and putting the benefits in trust. Simple products are designed to guide people but sometimes they end up having the reverse effect and being quite dangerous. It seems like another move to bypass IFAs.”

The consultation closes on 12 October.


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. Oh Gawd! Here we go again ! Stakeholder 2.
    Government can’t even sort out the countries financial problems without making 100’s of thousands of ordinary working people redundant.

    What hope they can design products which work?


  2. Oh yes they’ll all be queing up to buy one of these !

    Dont tell me ASDA will sell em and praps MAS !!!

    I can just see it ” can I have a couple of tins of beans, a loaf of bread, and one of those simple long term savings plans please”

    A challenge for Mr Hoban – If all this theorising RDR and all the other meddling being implemented by the likes of you fails miserably (as it surly will) can we count on you (and all the others) to fall on your sword ? Oh and we can have absolute confidence now we can see who inhabits the steering group – they clearly know whats what !!

    Answers on a stamp please.

  3. Stakeholder anyone?

    Is the country really run by buffoons!

  4. Walter Wall-Carpeting 2nd August 2012 at 10:55 am


  5. Hhmmm…gentlemen can I suggest you actually read the report. Ignorance is never better than knowledge.

    Your assumptions and conclusions are wrong.


  6. I wish the government would stop using the word simple as their last attempt to do this was a complete disaster!

    Anybody remember pension simplification for example.

  7. Walter Wall-Carpeting 2nd August 2012 at 2:29 pm

    Okay, Mark

  8. These guys have nothing better to do all day than design schemes like this. There are simple products out there already what good is putting £1 into a deposit account going to do? For people like this there is something called a money box! At the end of the day until what point do you keep money in a SIMPLE savings account? Kevin Tooze’s point is spot on.

  9. What is so complicated about savings and life insurance that requires them to be “simplified”. I would like to see the statistics on the number of people, when asked, who said that they found both to be overly complicated.

  10. Simple savings accounts exist now, but banks complicate them by having bonus rates and withdrawal penalties etc. The intention of this scheme is to make available products that customers can both understand and, more importantly, TRUST.

    Life cover is very simple, but try asking the customer if they want indexation or waiver and their eyes will glaze over. These products are clearly aimed to be for direct sale through non-advised channels, which increasingly will be the only channels that Joe Public will trust any more. IFAs might not like this concept, but get used to it because it isn’t going away.

    The big question to me is how the FSA will view a customer buying a basic life policy (say) when their actual needs would have been better served by something different? Sellers will have to caveat these products very carefully when they sell them.

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