I like Aegon’s IGC Chair report, delivered by top trustee Ian Pittaway. It’s not easy to find and though the report makes numerous references to its readers being its policyholders, I have no idea how a policyholder would stumble across it.
This is a serious issue for Aegon’s IGC Committee who are clearly taking customer feedback seriously. Indeed this is the first report I have read which actually captures the results of a survey conducted in 2015 (Zurich are promising much for 2016 but haven’t got their customer feedback going yet).
There’s a decent sample here of nearly 1000 customers and this complicated question throws up some really useful information not just for Aegon but for all IGCs.
What it tells us is that the vast majority of people want better outcomes and see this as way more important than ease of use of the pension.
If I was Ian, I would be concluding that 71% of my work as IGC Chair should be focussed on getting costs and charges in check, 55% focussing on investment returns and beyond that focussing on the risk in the return and tools to give people on-line access should outweigh all else.
The weakness of the report
Having got this clear steer about what matters, the report then focusses on what those surveyed considered ephemeral and is pretty spineless in its sections on returns and charges.
I don’t know if this is a coincidence, but my personal conversations with Aegon have similarly focussed on issues to do with platforms and fund choice and portals and tools but have been led away from the main event- what the outcomes of these retirement saving vehicles are likely to be.
Perhaps the IGC committee were comforted by the response to their survey’s response on satisfaction with fees and charges.
The OFT were quite specific about the level of understanding people have about what they are paying for their workplace pension plans.
The danger of relying on customer satisfaction surveys is that customers simply don’t have the information needed to make complicated judgements like “are you satisfied with charges”. Which is why Aegon (internally) look at net promoter scores which measure how likely customers are to promote the product/service in question to someone else.
The report mentions that the IGC has had access to the internal MI Aegon have shared on net promoter scores but they have not published the scores. Why not? They didn’t even comment on whether the scores were good or bad. Why not?
I am more than a little suspicious about this , because the bias of the report is to talk to Aegon’s strengths (customer communication, modellers, retirement platforms and flexible retirement options. The bias is against talking about what members are paying for all this and what the returns on Aegon policies have actually been.
I rather suspect that the net-promoter scores were rather less good than the customer satisfaction chart published above. What is retained internally is usually more real than what is displayed externally!
The strengths of the report
If the weakness of the report is the bias to Aegon’s internal agenda, its strength is the enthusiasm of the Chair to get readers to engage in the business of saving and to understand what Aegon are up to.
Most important for the IGC was the upgrade of customer policies from old to new. I suspect that this is a win/win for both policyholders and for Aegon and the report is good at explaining the benefits of Aegon’s new approach.
I fealt when reading the report that the IGC Committee really were enthusiastic about what they were doing and the tone of voice within the document made me want to read on.
Which is why- overall I think this is a strong report.
In terms of value for money, the concept of a dashboard doesn’t do it for me- we are going to be sick of dashboards (if we aren’t already) and the Aegon IGC dashboard isn’t doing it for me.
I’m worried by this statement in one of the appendices to the IGC Statement
The IGC concluded from the research results that customers’ views on value for money can be harmed if there is lack of transparency or poor communication around charges, fund performance and how current affairs are impacting investment growth. This is why we included clarity and communications in our value for money principles.
The problems with poor returns created (in part) by high charges, is not solved by greater transparency, it is solved by improving investment and this can be achieved (in part) by reducing charges.
I fear that the rather superficial approach adopted by Aegon’s IGC is a major flaw in its work. I assess this weakness as so flawed that I am giving the report a red – the committee needs to wake up and smell the coffee! The approach to assessing VFM must be in line with what policyholders want – not want Aegon want.
In tone, I like this report for its enthusiasm, for its clarity and for the language that it uses. I’m giving it a green,
In terms of the effectiveness of what the IGC Committee has done, I give the report a round of applause. They have really worked hard on the survey and they are properly engaged with the positive work that Aegon are doing to treat their customers fairly. I give the report a green for effectiveness (despite my reservations express above over measurement)
It’s early days in the process and I expect that the IGCs will approach 2016 a little more experienced and less “wet behind the ears”. I hope that Aegon’s 2016 report will retain its initial enthusiasm, the seriousness with which they listen to Aegon’s customers but I hope that they will put some distance between themselves and Aegon on value for money.