The Treasury has set up a steering group to develop simple financial products.
The group will look at setting benchmarks for simple products so they can easily be compared.
The products will need to meet individual clients’ needs and offer a fair deal as well as being commercially viable. The group is expected to report by the end of July.
It will consider if suitable products exist already, how new products can be developed, how they should be branded, how they should be approved and by whom.
The group is led by Lloyds Banking Group chief risk officer Carol Sergeant, with members from the Association of British Insurers, the British Bankers’ Association, the Building Societies Association, Money Advice Service, Consumer Focus and Which?while the Treasury and the FSA will have observers.
Treasury financial secretary Mark Hoban says: “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.”
Building Societies Association chairman Adrian Coles says: “The very wide range of products available can be offputting for some consumers. If the steering group can find a clear way of signposting straightforward, value for money products, it will have performed a very valuable task.”
Anand Associates managing director Bhupinder Anand says: “Simple products are a dangerous thing. It is like saying cheap food is good because it is cheap but it might not be very good for you in the long run.”