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Simple products steering group starts work

Carol Sergeant

A steering group to help with the development of simple products has been launched by the Treasury.

According to its terms of reference, the simple financial products steering group is tasked with devising a suit of simple financial products which will help consumers benchmark and compare other products on the market and are understood by the mass market. The products will need to meet individual clients’ needs and offer them a fair deal as well as being commercially viable. The group is expected to report by the end of July 2012.

Treasury financial secretary Mark Hoban said: “We want products that provide consumers with confidence that a simple product will meet their basic needs and offer them a fair deal. They may not necessarily be the “best” option for all consumers, but they should be a good enough option for consumers who have identified their key needs.”

The group will consider where suitable products exist already, how new products can be developed, how they should be branded and how they should be approved.

Building Societies Association chairman Adrian Coles says: “The very wide range of products available can be off-putting for some consumers.  If the task force can find a straight-forward way of sign-posting straight-forward, good-value-for-money, products, it will have performed a very valuable task.”

The group is led by Lloyds Banking Group chief risk officer Carol Sergeant (pictured). The Association of British Insurers, the British Bankers’ Association, the Building Societies Association, Money Advice Service, Consumer Focus and Which? are also members and the Treasury and the FSA will have observers within the group.

Hoban said: “I am delighted that Carol is chairing the Simple financial Products steering group, bringing her wealth of experience to the task. But we need your ideas, innovation and engagement if we are going to succeed.”


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Got a fantastic idea for all you “hands on ” execs diligently beavering away thinking up new ideas for the great unwashed. Sell some products which have premiums that can be collected at the door step by commission hungry salesmen, simples!!!
    Oopps silly me you’ve spent the best part of 20 years abolishing simple products hav’nt you. Numpties!!!

  2. I thought that this idea of a suite of simple and cheap products were tried before: stakeholder. Isa’s with the kite mark etc. It seems to be here we go again.

  3. Didnt she leave Lloyds over a year ago?

  4. Whenever the subject of “simple” products is aired, a number of people swiftly cite stakeholder pensions and point out what a flop they were but, in truth, stakeholder pension plans were no simpler than ordinary PP’s products. The only way in which they differed from ordinary PP’s (apart from old-style plans with things like Capital Units, which were already on the way out) was that they’d had the cost of advice beaten out of them, along with valuable supplements such as Contributions Insurance and Life Insurance. In virtually all other respects they were identical ~ the same rules on input limits (except for non-earners), the same irrecoverable tax debit on div income, the same annuity (rates) trap, the same LTA restriction, the same punitive death tax on unspent funds, a vastly more restricted range of funds and very poor levels of service reflecting their lack of profitability for providers foolish enough to try marketing them. They weren’t simple at all.

    Simple products already exist ~ plain vanilla life insurance, Cash ISA’s, NS&I savings products and, dare I say it, some structured products such as five year Capital Guaranteed Investment Bonds.

    This latest initiative to come up with a suite of simple products is just a waste of time and OPM, as I expect the FSA has already privately admitted. And, given that an inevitable key element of simple products is that they too will include no margin for the cost of advice, who will sell them? They won’t sell themselves and thus the creation of a new suite of such products will do nothing to narrow the savins chasm. These people really do need their heads knocked together.

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