We have a number of further challenges this year which we would like to see progressed by Aviva. We will, once again, make allowances for the pandemic when assessing how successful Aviva has been in delivering their commitments. The following is not an exhaustive list of where we expect to see progress and will let you know how Aviva have performed in each of these areas.
Aviva only launched their Investment Pathways in February of this year and so we have no experience of how members have used the Pathways, and only limited information as to how they compare with other firms in terms of costs and charges. We will expect Aviva to provide suitable management information to enable us to make a full assessment of value for money. Should we believe that Aviva is out of step with other providers, we will make the necessary challenge to ask them to address any concerns we have.
Aviva has undoubtedly committed to an ambitious plan to progress their ESG ambitions and become net zero carbon by 2040. That may seem a long time away but is ahead of most other firms’ commitments and ten years earlier than originally committed to. While we praise their commitments and ambition, we expect to see progress throughout the year and see the implementation of measures to assess the progress against their plans.
As we come out of the pandemic, we will expect service levels to improve. We cannot criticise Aviva for how they have continued to support customers during the pandemic but as things start to return to normal, we will expect to see improvements across the board. We will monitor all areas throughout the year which will include key transactions, telephony, complaints and your feedback.
The disclosure of costs and charges this year only includes default investment funds whether they be Aviva’s own defaults or those designed by your employer or their adviser. Next year brings a new requirement to disclose costs and charges for all funds which is a significant challenge for Aviva. We will be monitoring their progress in this area to ensure their delivery of these changes remains on track.
We will be discussing the findings contained within the independent consultant’s report on Aviva’s default investment funds in more detail throughout the year to understand more about how Aviva is considering their findings.
We are soon expecting new rules from the FCA to tell us how to assess value for money. Their proposals are to make costs and charges, investment performance and service, which includes communications. We do not believe that this is a broad enough framework and will continue to assess other areas. The FCA has only recently extended our remit to included ESG and Investment Pathways and so to dilute our assessment now seems contrary to their proposed new rules.
It is likely that new rules will require us to assess value against other providers using information that is publicly available. This is a challenge and will likely be a comparison between other IGC’s reports. However, we are exploring also other sources of comparable information: to help facilitate this we have agreed to participate in a benchmarking exercise with Redington, an independent investment consultancy, which will allow us to compare Aviva’s offering against other providers in a number of areas. The exercise is designed to compare certain groups of employers of similar size to understand if they could potentially receive better value elsewhere.
Along with other IGCs and providers, we have been in discussions with the FCA to talk about the practicality of delivering their proposed new rules. This relates to the disclosure of costs and charges which is likely to change significantly next year but could make IGC reports more complex. We await guidance from the FCA.