Most internet comparison pages are misleading and should be taken down
We have a problem with internet lead generation which has been investigated by Laura Purkess and promoted by Jack Gilbert. Here is the twitter thread (note these are screenshots – if you want to read Laura’s article, use this link.
The new introducers are not only on-line but largely robots, providing pseudo- directories which turn out to be no more than a “data capture” for selected clients
One of the lead generators I’ve investigated on this blog have actually been owned by a regulated IFA and was used to generate interest in a decidedly unsavoury offshore investment product.
Since the lead generators are operating outside the “regulatory perimetre” and aren’t considered financial promotions, they are subject to the strictures of advertising standards. The FCA can’t do anything but if the lead generators are mis-leading, then they should be reported to ASA which has been regulating internet ads since 1995
These sites are not like Money Savings Expert
We need to be clear, what these pseudo- comparison sites that appear on the web are doing is not in anybody’s interest but the lead generator and their clients that you alight on their advertisements.
The sites that they put up are no more than data captures designed to monetise your interest , they do not do , what Martin Lewis and others do and provide genuine content and forums that allow people to make their own minds up as to what to do next.
Indeed , Money Savings Expert explicitly states what it is earning when it passes you on to one of its partners and is regulated by the FCA as a lead introducer. It’s disclosure on how the site is funded is a model of its kind and informs this debate as no other document I have read.
I constantly refer to this document when thinking of how to provide the AgeWage service and am concluding that Martin Lewis’s system of * disclosures is the best to follow. The asterisk tells the customer that following a link with an asterisk will make MSE money.
They are not creating value and costing a lot of money
Lead generation costs IFAs a lot of money, indeed it costs all financial services companies that use it, a lot of money.
It is making lead generators a lot of money and that money is pretty well risk-free. Well it is so long as the lead generators stay on the right side of the law. I have visited organisations that generate leads the right way and use web-pages and they are thriving with high customer satisfaction ratings both from consumers and those paying for the leads.
Typically these companies work on a revenue share basis and aren’t paid by the lead generated. Typically the good organisations are transparent in their finances and the corporate customers they work with.
Money SuperMarket is one such company and the best , the commercial comparison sites which MSE often links to, are also excellent in offering people access to simple financial products which are easy to compare.
But the model for these sites is limited in ambition. There is no pension aisle in the money super market and for good reason. The product – a retirement plan- is too complex for the model.
There is a gap in the market for a simple way for individuals to become savvy buyers of retirement services. Over the summer I hope to spend time looking at how that gap could be filled.
We must find a way to help ordinary people find value for money from their pension savings and a way to help them convert pension pots into retirement plans.