FR: You recently announced the merger between Family Investments and Engage Mutual – what benefits will this bring?
We launched OneFamily in April and the key benefit for our adviser and broker colleagues is that we are bigger and better together. We are building a modern mutual and already count one in 12 families in the UK as our customers.
Many of your readers will know Engage because of its 15+ year presence in the adviser community as a pioneer in selling its over 50s product through this channel. We’ll be taking learnings on ‘best practice’ from that extremely experienced team and developing opportunities for other products, and new product development, for potential distribution through this channel.
For our members there are enormous benefits arising out of the efficiencies the merger creates, and the fact we now carry more clout as a bigger player which means we can be evenmore competitive and diversify into areas where families are currently underserved.
We’ve also launched our OneFamily Foundation, a unique customer benefit which makes being part of OneFamily meaningful in a very real way for our members. We are making £5 million available to them over the next five years, in the form of personal grants and funding for community projects.
FR: Have you got any big plans or exciting news coming up that you can tell us about?
We’ve been very open about our plan to create a modern mutual that helps families meet the financial demands of modern life.
Taking two award-winning organisations with expertise at different ends of the family spectrum (Family Investments is renowned and has been recognised throughout the industry for its award-winning children’s saving products; Engage is recognised for its Defaqto five star rated over 50s life insurance), we are looking to expand our product portfolio and enter new markets with a focus on answering the very real needs families have, particularly where those needs are not currently being met.
Since merger in April it’s been very much business as usual as both Family Investments and Engage are continuing to trade under their own names, but we will be rebranding under the OneFamily name soon. We will be communicating to our adviser networks about this, alongside announcing some service changes and new product benefits in the coming months.
FR: Can mutuals challenge high street banks?
In my opinion, this is already happening. The pressures on the financial services industry since the recession started in 2008 meant many larger corporates withdrew the services that families found valuable.
Our own research, conducted with YouGov, found that fewer than half of all British adults (45%) feel that their high street bank has sold them the right products.
And our research also shows that people value the key characteristics of mutuals, so there is a real commercial opportunity there for us, especially as 38 per cent feel that their bank is untrustworthy compared with just six per cent when asked about mutual societies.
But to compete with the major financial services providers, mutuals need to modernise, to have a clear strategy and vision, and to provide relevant products that people want to buy. As a modern mutual OneFamily is committed to running our business efficiently to create savings that we can invest in a wider range of products to help every generation
We will be announcing an extremely positive trading update shortly which, combined with an excellent 2014 year end and run up to the merger, confirms the appetite is there for a modern mutual that understands the way families’ financial needs are changing.
FR: How do you see technology changing the way the sector operates?
Obviously there have been huge strides in how we all use technology. Our view is that we should always make sure the technology works well for both our adviser community and the end customer.
All our application processes are online, for example, because it means advisers can get clients on risk in less than 10 minutes from submission, because we know a quick process is business critical for advisers. We are also working on digitising case tracking and other areas. But we also ensure we still have a dedicated customer service team on the end of the phone, because we appreciate that in some instances, technology cannot be a substitute for interaction with a person.
In terms of how technology will affect and change our sector, I think at the end of the day you absolutely have to have the right products to meet the customer need. Technology is another tool to use, but it needs to work hand in hand with real customer insight and understanding.
FR: How do you think the pension reforms will affect savings products?
The Government thinking on savings is clearly promoting the ISA route, and post-Election that’s likely to continue. We’ve seen the introduction of flexible ISAs and spousal inheritance, and the ‘help to buy’ ISA proposals, although whether that proves commercial enough for providers remains to be seen.
The increase in the ISA limit to £15,000 provides a positive opportunity for customers and potential customers to save large sums tax free outside their pension pot.
However the uncertainty around annuity changes ultimately creates instability in the market which isn’t a good thing for those who are reaching retirement age andare not sure which way to turn to get the best value.
Uncertainty isn’t good for consumers. The range of retirement solutions products available has not developed as quickly as we would have expected and it will take a while for the market to stabilise following the changes that have been driven in.
