Simple products must 'do what they say on tin': Consumer Panel

Consumers who want or would benefit from buying a financial product must have access to a range of simple plans which "do what they say on the tin", the Financial Services Consumer Panel (FSCP) said today.

Research published by the panel suggests product complexity is a "significant stumbling block" for consumers who find the process of choosing the right product a stressful and "frequently unrewarding" experience.

In December, the Treasury called on product providers to develop ‘simple' deposit savings, life insurance and income protection products and launched a consultation over its proposals, which closed in March.

"The panel wants to see people given access to products that do what they say on the tin," FSCP chairman Adam Phillips said.

"We hope that research will encourage a debate within the industry, government and amongst consumers regarding the availability of products with straightforward outcomes."

Following the banking crisis and the PPI scandal, the panel said it is crucial trust is rebuilt in financial services.

"We think that the ability to buy products that have straightforward objectives and which deliver clearly-defined results will help to do this."

In its research, the panel set out likely criteria for product types meeting these objectives.

"In the future we look to the development of a range of straightforward outcome products which, depending on the individual consumer, could either be sold execution-only, or through an advice process." it said.

The Treasury's December consultation 2010 said there is a role for simple financial products which can be easily understood and compared in order to help consumers take responsibility for their finances.

It suggested simple products may be developed for specific groups, such as the elderly or first-time savers.