If you go into a supermarket to buy, say, green tea you are likely to find a plethora of different flavours from Tetley from pure green tea right through to green tea with citrus and spice or cinnamon and honey. The choice, along with so much else on offer by so many brands can get confusing for customers. All you want is a pot of green tea but at least you can walk away or try something new without too much financial outlay.
The pension market, where what most retirees just want is the best income for life (so that they can sit and relax with their well-earned cup of tea) is fiendishly confusing and the buying stakes for customers is much, much higher.
One of the key arguments for ethical business practice is that an organisation (or business sector) is more likely to avoid the scrutiny of the Regulator. So today, the Financial Services Consumer Panel, which works with the FCA, reveals that some firms confuse customers and charge them high commissions when they are out in the market trying to buy an annuity. "The general outcome for consumers is akin to a lottery", exploitative pricing and hidden charges are also discovered.
Compliance with regulation costs business a lot of money. Making the changes to treat customers fairly with clear, simple, transparent pricing and explanations will undoubtedly increase costs initially but with c 400,000 annuities sold each year, building up a reputation for fair, simple and transparent treatment of customers surely makes good, long-term business sense and hopefully will keep the snarling financial watchdog more at bay.
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