Pension Simplification could leave the pensions industry facing a £100m customer service bill, answering questions from IFAs and customers about the A-day changes, claims software company Transversal.
The effect of new regulations on 14.3 million private pension holders will mean customer enquiries are set to significantly increase as more people will want to know how it affects them.
Transversal, an eCustomer service software company, estimates the average cost of a single straightforward email query is around £6.50, but if each pension holder in the country asked just one question, the cost to the industry would be about £93m.
However, the company points out that as pension queries are likely to be more complex and take longer to handle, the cost could double or even treble, which would bring the total bill closer to £300m.
Other potential costs for the industry include recruiting and training up to a 1000 more customer service staff to deal with the queries, along with making sure they provide consistent, accurate information which will help reduce the amount of distrust among the public, and limit the risk of mis-selling. The company claims the net effect of all these customer service costs could damage pension values through reduced profits.
According to Transversal, some pension providers including Standard Life, have started to use their new ‘IFA Answers’ eservice helpdesk in an effort to reduce the potential customer service costs. The tool, developed by Transversal, uses the internet to provide customers, IFAs and staff all have access to the same information.
Advisers simply log-in and enter their question, and by using its human language understanding, the programme provides an accurate on the spot response.
David Yap, chief executive and co-founder of Transversal, says: “Pensions Simplification could cost the industry millions just to answer basic queries. Pension companies need to act now to reduce customer anxiety, potentially damaging misinformation and to avoid their contact centres being swamped by queries as the A-day deadline approaches.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected].IFAonline
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