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Survey says pension firms fail on statement quality

A new survey of pension statements claims major companies are failing to reach an acceptable benchmark for service.

The research from Dalbar claims that Legal & General, Prudential, Suffolk Life, Aegon and Scottish Equitable all failed to meet the standards set for the survey.

The research looks at whether pension providers give key information to their customers, including projections, asset-allocation overviews and comprehensive data on investment performance.

Dalbar is a US firm which specialises in stress-testing life and pension products. The company has branched out into the UK with Syndaxi Financial Planning managing director Robert Reid.

The company has rated 11 major firms, scoring them in five categories including clarity and highlighting critical information.

Standard Life tops the list but none of the providers manages to qualify as “good” by reaching60 points so no statement receives a Dalbar designation.

L&G, Pru, Suffolk Life, Aegon and Scottish Mutual all failed to make the benchmark score of 50.26 points.

Under three-quarters of statements provided savers with a decent way of evaluating their pension performance, for example, with data on investment gains and losses for the entire plan and each of the underlying investments.

The research suggests that very few statements provide planholders with any means to evaluate their retirement investment strategy, such as by explaining the importance of diversification.

Axa gets praise for providing a checklist of what planholders can do to review their ability to retire and Norwich Union for providing one, three and five-year rates of return for the pension fund and asset allocation.

Aegon spokesman Mark Locke says: “It is apparent that none of the providers listed comes up to Dalbar’s standards on policy statements. We are aware of the issues and are working to improve clarity.”

Suffolk Life director of sales and marketing John Moret says: “We are working on improving our statements on the back of our own research.”

Reid says: “The quality of pension plan statements is poor overall in the UK compared with the US. It demonstrates that firms are still too focused on attracting new business, which is incredible given the evidence of churning and unprofitable business.”


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