Kitemark for simple finance product
A life insurance product has become the first financial product to be awarded a kitemark for "doing what it says on the tin" as part of a new initiative to make it easier for consumers to shop around for deals with no unexpected catches.
The move follows a Treasury-commissioned review which recommended a suite of simple and transparent financial products, which would also include savings accounts.
The review was led by Carol Sergeant, a former chief risk officer at Lloyds Banking Group and the f irst deal to be certified is a fixed-term life insurance product from Barclays, underwritten by Aviva.
The products will be supported by an independent certification process run by BSI (British Standards Institution). Each one will be subject to ongoing audits as well as post-purchase surveys to check whether the customer saw the product as being easy to understand. If the products are found to be no longer up to scratch, certification will be withdrawn.
Tests that the financial products will have to pass in order to receive the kitemark include having a clear pricing structure to allow comparisons, using standardised product names which make it easy to understand what the product is for and having clear and standardised language around the product.
Ms Sergeant said: "I'm delighted to see the first simple financial product independently certified and our recommendations become a reality. And there are several more simple financial products in the pipeline.
"These products will be easy to understand, easy to buy and easy to manage. The BSI certification process will ensure that the products do what they say on the tin and the BSI kitemark will be available to any financial services company that meets the standards.
"All mainstream providers of financial services should offer their customers the opportunity to buy independently certified simple financial products, and I look forward to more firms introducing these products."
Catherine McGrath, managing director at Barclays Personal Banking, said: "We know that customers want their bank to be upfront, clear and transparent.
"We are pleased to be able to offer the first certified product and see this as an important step forward for the industry. We are determined to drive simplicity across our product range."
Economic Secretary to the Treasury, Andrea Leadsom, said: "The Government set the industry a challenge last year to bring out simple savings accounts and insurance products, with no teaser rates and unexpected catches, or confusing jargon.
"I welcome the hard work across the industry that has been put into this simple products initiative to date and in particular their commitment to make these products easy for customers to recognise and trust. I look forward seeing a range of simple products on the market before long."