Often referred to as Mr SIPP, or the godfather of SIPP, for his work in developing the self-invested personal pension market, Square Mile insider John Moret is one of the most influential figures in the UK’s pensions industry.
He is currently chair of advisory business Intelligent Pensions and a non-executive director of Gaud, a fast growing SIPP business. His real passion, however, is a small customer experience insight business called Investor in Customers (IIC) where he is non-executive chair.
IIC has a growing presence in the financial services market and clients include AXA, Northern Trust, Ardonagh Group, LGIM and Barnet Waddingham, as well as leading trade associations PIMFA, TISA and the CSA.
In an exclusive interview with City A.M.‘s Michiel Willems, John Moret discusses why he is so passionate about customer experience, the recent FCA’s consumer duty proposals which will affect all regulated Financial Services businesses and why he wants to see the SIPP label killed off.
Firstly, let’s zoom in on the latest FCA proposals. You believe that measuring the customer experience is relevant to the watchdog’s proposals on consumer duty. Why is that?
In their consultation paper, the FCA are suggesting that all regulated firms in future will have a duty to take all reasonable steps to avoid causing foreseeable harm to consumers, to enable customers to pursue their financial objectives and to act in good faith. There are four specific outcomes suggested as the key elements of the relationship, these are communications, products and services, customer service and price and value.
As yet there is no clear guidance provided on how the FCA intends to assess or measure these outcomes but obviously customer experience will be a key element.
What are your views on these proposals?
I broadly welcome them. Delays in processing pension transfer payments are far too common. Investment scams have become a regular feature. Consumers have been bombarded with meaningless pages of paper supposedly to help them understand the worth of their pensions and its longevity.
“For far too long many providers in the pensions industry have paid lip service to customer outcomes.”John Moret
The shortcomings in advice and guidance to those utilising income drawdown are very worrying. The industry has been woefully slow in adopting new technologies although some of the newer “Fintech” retail pensions providers are looking to change that and gain competitive advantage.
How concerned should regulated businesses be about the FCA’s proposals on consumer duty?
All regulated businesses in the financial services market should look out for the FCA feedback on the consultation paper which is promised before the end of the year. They are looking to implement their proposals by the end of July 2022. So just 7 months to review the four customer outcomes and consider how they are going to measure them and evidence their performance. That’s where customer insight will be so important. But it’s not just about meeting regulatory requirements, our experience shows that improving the customer experience ultimately leads to competitive advantage and profitability.
Given you are Mr SIPP, it would be remiss of me not to ask about how optimistic are you about the future of SIPPs?
The market has grown to be worth almost £500bn in funds invested on behalf of nearly 3m investors. However this growth has not been without pain. The consequences of pensions simplification in 2006 and pension freedoms in 2015 have led to a lot of SIPP investors losing some or all of their investments. That pain has also resulted in a number of advisory firms going to the wall along with several SIPP businesses.
I believe the SIPP label is now misleading, many SIPP investors have little or no involvement in the investment decisions and a growing number of SIPP providers are no more than glorified “personal pension” providers offering a limited range of investments.
“From the day that Nigel Lawson announced the introduction of SIPPs in March 1989, I have been a huge supporter.”John Moret
SIPPs have also been used by many scammers and we need to be very careful that those investors managing their own investments for ESG reasons, does not lead to another pensions scandal.
So while optimistic for the SIPP market, I wonder if it is time to kill off the SIPP label and revert to a new and more appropriate title such as an Individual Pension Account (ISA)! A name that immediately focuses on customers rather than financial methodology.
Finally, let’s zoom in on your customer experience insight firm Investor in Customer. When did you first get involved?
That was 15 years ago. At the time I was working with Suffolk Life (now part of Curtis Banks) a leading provider of SIPPs and commissioned the first ever IIC assessment. I was so impressed that I became a shareholder and in 2009 was invited to become non-executive chair. It is universally accepted that financial services could do better in the way it deals with customers. But few firms engage with them and so don’t really know how they think and feel.
“When you talk about customer experience, what exactly do you mean? It is often confused with customer service.”John Moret
It is also important that it isn’t just the end customer’s perspective, but rather that of employees and customers. Comparing the different views and identifying gaps between what the senior team think, what employees are doing and what customers believe they are receiving provides a true picture and can be business transformative.