“Simple” financial products get steering group

by Gill Montia

Story link: “Simple” financial products get steering group

The Government’s vision of a range of “simple” financial products that can be easily understood by consumers has taken a step forward, with the formation of a new steering group.

According to research undertaken for the Financial Services Authority, 52% of people find it “too complicated” to compare one product against another and 46% “don’t know” if they are getting a good deal on a financial product.

However, the steering group, which comprises representatives from government and from trade and consumer organisations, will now consider how “simple” products should be structured and brought to market, starting with deposit savings and protection insurance.

Carol Sergeant, former chief risk officer at Lloyds Banking Group, has been appointed to chair the group, which will submit its final report to Mark Hoban, Financial Secretary to the Treasury, in July 2012.

Commenting on the project, Ms Sergeant said: “Simple, easy to understand products need to be a viable commercial proposition for the industry, while offering consumers a straightforward benchmark that gives them the confidence to make good decisions in an often bewilderingly complicated market place.”

She added: “Getting this right will require the involvement of consumer groups, financial regulators and the Money Advice Service, as well as the savings, investment and protection industries.”

Responses to a Government consultation on “simple” financial products completed earlier this year can be found on HM Treasury’s website.