AEGON calls on FSA to listen to consumer needs

AEGON UK is calling on the FSA to take account of what consumers want from financial advisers as it moves ahead with its advice reform agenda with the Retail Distribution Review.

In its sixth Thinkpiece published today by the Chartered Insurance Institute (CII), AEGON discusses the findings of its 18-month consumer research project, aimed at discovering what people really want from a financial adviser.

Following a number of deliberative research sessions involving over 140 people, AEGON identified a number of core consumer needs. These ranged from wanting to better understand financial products; a separation between advice that helps them understand products and advice that helps them buy; and what the consumer gains from advice such as long-term planning and motivation. A popular concept was the idea of a financial "Weight Watchers" where people gained motivation and support from a group environment.

As a result, AEGON identified five advice concepts, which were then validated through further research:

Financial guru - an independent expert giving high quality, holistic, ongoing, and personalised financial advice. Recommends products and can access them but selling them is not the central point.

Financial coach - to get people motivated for financial planning and keep them committed

Drop-in centre - an initial problem-solving service for people with specific financial problems or needs

Personal shopper - to simplify the choice available and provide products to suit the customer's needs.

Financial superstore - to make buying easier for people with straightforward needs or who have a good understanding of what they want.

Some of these concepts can be seen in current market services. The financial guru is broadly aligned with the Retail Distribution Review (RDR) proposals for the future Independent Financial Adviser. The drop-in centre is similar to what AEGON chief executive Otto Thoresen has proposed in the new Money Guidance programme.

For concepts such as the financial coach and personal shopper, consumers have drawn on the retail experiences they enjoy in other areas of their lives, and have asked: "Why can't financial services be like that?"

In its response to the RDR Interim Report, AEGON has called on the FSA to take account of what consumers want. AEGON believes its research demonstrates that consumers would respond positively to new models of advice being developed - and that the RDR must encourage this.

AEGON head of corporate affairs Francis McGee says: "AEGON's research showed people are keen to take financial advice that helps them gain confidence and overcome what they recognise to be bad habits and do the right thing with their finances. They have identified models of advice that are not available within the currently regulatory framework. People looked at support services available in areas of their lives such as fitness and diet, and asked, "Why can't financial services be more like that?"

"There are initial signs that people might be more willing to pay for advice that's presented in the right way and designed around their lifestyle."

"The FSA must remember that one of the original aims of the Retail Distribution Review was to open up advice to the wider market. Good quality financial advice is essential to helping people take out the protection and savings they need for the future - so let's work together to make this a reality."

CII director, policy and public affairs David Thomson said: "Much of the current RDR debate has focused on regulatory reforms but just as important is ensuring the voice of the customer is heard. This research and its findings does just that. It shows that consumer behaviour is as important as studying demographics and social structures in understanding buying habits and patterns. It is a wake-up call for regulators and the industry alike.

"How customers behave and navigate through the often bewildering world of financial services is fundamental to the changes needed to help improve public trust and confidence."