We have identified a number of areas where we want to see progress in 2020 and into 2021. We will be challenging Aviva to deliver improvements in a number of areas:
The FCA now require us to consider and report on Aviva’s policies on Environmental, Social and Governance (ESG) issues for the products we oversee. We see this as a significant increase in our responsibilities and will be working closely with Aviva’s senior management to enable us to comment on this in our 2021 report. The IGC also wishes to assess further ESG developments for potential future investment funds and how these relate to the default funds for most products and policyholders.
The exercise to move customers with older products to more modern products is underway, but we want to see the pace of delivery increased. Aviva has told us that some customers may benefit from keeping an older product rather than moving to a more modern one, but they will need to provide analysis showing us that this is the case. We have asked Aviva to identify those customers who would benefit from not moving and demonstrate to us that remaining in their current product does indeed provide better value. We expect these questions to be answered as a matter of priority. Acceleration of this programme is key in reducing the residual difference in charges and value for money between older and newer contracts.
While we are pleased that Aviva has addressed our challenge to remove all higher charging units, not just for members aged over 55, we have asked them to move as quickly as possible to complete this exercise. This will also remove the exit charge for these members which is particularly important with regards to the transfer programme already mentioned.
Aviva has an ambitious delivery plan to improve the experience of members online. Significantly increased functionality is planned for the second half of 2020, and we have asked Aviva to provide regular updates to us throughout the year.
Following the initial millennials research undertaken in 2019, Aviva has committed to a much wider survey to gain the views of savers as to what constitutes value for money and how these views differ between generations. This survey is already in the planning and design stage and will remain a key area of focus for us this year.
We want to learn more about how Aviva measures member engagement. This could be by customer feedback, showing how many savers pay more than the auto-enrolment minimum level of contributions or an extension of their financial education programme.
The FCA has amended the rules on the remit of IGCs to ensure that they assess communications to members and check that they are fit for purpose and satisfy the needs and objectives of members. This extended remit will be reflected in the evidence the Committee seeks from Aviva to show that value has been provided to members.
We are already working closely with Aviva to understand their proposal for providing customers with a suitable investment solution when they reach their selected retirement age. We are also working with their communications team to ensure that literature relating to Investment Pathways is clear regarding the investment objectives for each pathway and that those communications are fit for purpose. We have asked Aviva to provide a clear plan showing their timetable for delivery and will report on our assessment of value for money in this area in 2021 as required under the new FCA rules.
From 2021, Aviva will need to be more transparent in the way they disclose charges to you in relation to default investment solutions. This extends to all funds from 2022. We are required to ensure that such disclosure is compliant with the new regulations and have spoken with Aviva’s Change Committee to understand how they intend to deliver a solution in this complex area.
In November 2019, the FCA requested all firms who operate an IGC to provide data and evidence to support their review into the effectiveness of IGCs. They intend to publish their findings in the second quarter of 2020. We will act on any recommendations they make where necessary.
We will report on progress against all of these priorities in our 2021 report.
