Andy Masters, Partner, Savings and Wealth, KPMGAt the Association of British Insurers (ABI) Biennial Conference on 3 November, Andy Masters, Savings and Wealth Partner at KPMG, will chair a session on The Pensions Revolution – What’s Next? He looks ahead to the session, and highlights themes that should top the industry’s agenda.
At the ABI Retirement Conference earlier this year, I cheekily suggested half of the attendees might not have a job in five years’ time (or at least, not the same job). Only a few people looked surprised.
It wasn’t a criticism of anyone there, or their employers. It was simply a statement about the scale of the transformation the industry is currently going through. This, I believe, will result in a slimmer, simpler long-term savings industry.
As KPMG recently highlighted in Freeing the Future? Market Impacts of the Pension Freedom Reforms, the UK pensions industry has undergone 15 major changes in 17 years. And with the Financial Advice Market Review and the green paper on the taxation of pensions, there’s plenty more change to come.
https://www.youtube.com/watch?v=qKhBECIPrkk&feature=youtu.be
To its credit, the industry has shaped up well to the challenge of implementing pension freedoms in April. And the government too should be credited for getting Pension Wise up and running, in the face of some scepticism. Both achievements were crucial to consumers being able to exercise their new freedoms.
But to really enjoy the fruits of the revolution, consumers need to understand more and save more. The first challenge is how they get appropriate advice or guidance. The second is how to get consumers to accumulate sufficient sums to afford them decent choices at retirement.
The pension revolution is a societal transformation – shifting the responsibility for retirement income onto consumers. But the industry must also itself transform: to become more customer-centric. To develop simple, transparent products that encourage long-term saving. To engage with consumers in new ways that build trust. To become consumers’ preferred providers of guidance and aggregated information about their finances.
The companies that achieve this may well be those that transform their mindset - moving beyond rigid traditional channel boundaries to true customer-centric, omni channel solutions. They will almost certainly be the companies that use technology and data to provide better services. And this may involve the provision of automated guidance (just what can ‘Robo-advice’ really do for customers?) or using data to segment their customer base down to the individual.
So, there’s plenty to talk about at the ABI Biennial Conference. The pensions revolution will create huge opportunities for companies with the stomach and capacity for business model transformation, implementing regulatory changes whilst simultaneously innovating in their approach to products and consumers.
This ABI Biennial Conference session on The Pensions Revolution – What’s Next? will discuss and map the pathways for grabbing these opportunities. I look forward to seeing you there.
Andy Masters is Partner, Savings and Wealth at KPMG