The Meaning of Value

Well, good afternoon. Thank you very much for coming to join us this afternoon and taking an hour out of your day. Hope you find it useful.

We've got two of us presenting today, you probably see that. Mike and I, who I will introduce, essentially we're talking about the meaning of value. So it feels like quite a hot topic.  We've had at least two or three years now of the Financial Conduct Authority, the FCA, talking about value and assessment of value.  We've got the value for money consultation on the go as we speak for workplace pensions, all sorts of mentions of value and how we assess it. So let me talk a little bit about what we're going to cover today.

I'll do a bit of an introduction. My name is Jamie Jenkins, Director of Policy at Royal London, I spend a lot of my time talking about industry matters, policy matters. I speak to regulators and indeed politicians about how the things that they do, and we do, shape our industry. So very hooked into the sort of political agenda, the policy agenda, the regulatory agenda. That's essentially what I do. I'll do a bit of an introduction in a second and then I'll hand over to Mike Barrett who's the Consulting Director at the lang cat who I'm sure most of you know or have heard of and he will take us through the findings of our report. I'll introduce Mike in a second.

And there will be time for questions and answers so please do drop your questions into the questions section, if you have that, as we go through and I'll pick them up and either Mike or I will field them when we reach the end. It is CPDable so you can claim up to an hour’s CPD for this and by the end of the webinar I'm going to go through all these points but we'll talk to you about how clients define value, what matters most to them, the attitudes towards AI and Targeted Support which of course are poignant nowadays and of course how you might use some of this research in your role.

Essentially what I want to do, what we wanted to do, is bring this research to you and I'm certainly not trying to tell you how you should deal with clients or indeed what all of your clients specifically think – it is taking a snapshot of what we've picked up when we research the market about value so, you know, hopefully you will find it useful and something you can make of it.

A bit of an introduction from me, and then I shall stop and hand over to Mike. Essentially, we thought about this quite hard about three years ago, and we started to think, well, the world is trying to define value in financial services. But more broadly, you know, people are very discerning about value and how consumers judge that with the purchase of any product or service for that matter. For our part in financial services, obviously there's been a lot of wrestling with regulators and others on what constitutes value, what people think of when you talk about value.

So we commissioned at that point, the lang cat, to do the first study three years ago and help us define value in the eyes of consumers, people who were advised -  what they thought of providers, what they thought of advisers, and indeed what advisers thought of the word value too. We're now on to this third year. So rather than a snapshot now, we've now got almost a trend view of that world.

And it is a changing world. We’ve had, as I say, the consumer duty and assessment of value. We've got the value for money. All of this has happened since we did our first report and the world  continues to change around us in various other ways with the advent of things like Targeted Support, but perhaps more significantly the role of AI. We've introduced some new questions and developed and evolved this as we've gone along.

So with no further ado, I will hand over to Mike to take you through the findings of our third report.

Thanks Jamie and good afternoon everyone. Thanks for choosing to spend your lunchtime with us rather than trudging around in the grey and misery of another February Tuesday. We're sat in Royal London's very nice offices in London at the moment, and I can see the Shard, but I can't see the top of the Shard. So, yeah, horrible day in London. It's a grim day, so hopefully we'll have some entertainment to lighten the mood around this.

Right, into the subjects in hand. As per the introduction, this is some research which we've been conducting now for three years on behalf of Royal London. It's one of our biggest studies we do every year, mainly because it combines both adviser research through our adviser panel. I'm sure there's a few advisers, advice professionals on the webinar today who completed the call, so thanks as always for your time. And if you want to be part of our adviser panel and for some reason you're not, then go on to our website. I'm sure you'll be able to find details about how to sign up there.

So yeah, we conducted research with our adviser panel, both a survey and a few advisory interviews along the way. And then also we partnered with Opinium in this case to conduct consumer research. Again, in October last year, that was a representative sample, so just over 2,000, I think it was, from memory of the UK population. October's quite relevant for this. We'll come back to this as we talk about some of the findings, particularly on the value that advisers add and the activities that they get up to as well. There was a lot of noise around the auto statement going on in October, so we surfed the wave of that to see what consumers made of it all.

Really, I just wanted to take through two or three parts of the report today and starting off with this kind of big question of asking what consumers value. I think, as Jamie alluded to, and I think everyone is aware of, the only person who can answer whether something is of value to them is the individual themselves.

It struck me this morning, I was sat on the train and browsing through LinkedIn and seeing some LinkedIn pro talking about a business class flight that he had taken to Miami and he was moaning about the terrible food that he'd been served on the plane to Miami. I mean real first world problems there and for him that flight wasn't value because the meal that BA served him was substandard. Whereas for me I look at the big seat there and think about the business lounge he'd have had before, the priority boarding and the priority security and all of those aspects would probably trump the fact that airplane food is going to be bad anyway.

So you make your value judgments as an individual, something that one individual might say is of value to them, might be of poor value to somebody else, but it's also in the context and the kind of context and the scenario that you find yourself in as well. I might fly business class again and decide, you know, I do want to have a middle and all the rest of that and I'd make a different value judgment along the time.

So what the survey talks about is trying to pull all of that together into some more kind of coherent thoughts, hopefully, and some more coherent analysis around how consumers make value decisions, and then also how they make value decisions within our world of financial services and also financial advice.

At a very high level, whenever each of us are going through that decision process, whether that's buying a car or coffee or business class flights to Miami, there's kind of three stages which we will find ourselves kind of mentally going through. Firstly, does this product or service actually meet my needs? Is this coffee going to have a caffeine hit that I need? Is this flight going to where I want it to be going? That tends to be a fairly quick and easy judgment. No, the flight's not going near Miami, therefore, yeah, it's not going to, this ticket, you can see that isn't going to be of use to you. It’s Not going to meet your needs. 

But then we also have the two more subjective points coming in. Anybody can see that the product or service isn't going to meet your needs. But then the emotional values and the experiential side of things are the bits which are unique to each of us as an individual. So firstly, does this product or service, if that's relevant, does it make me secure? Does it make me feel confident? Then also looking at the convenience side of things. How easy is it to use? Do you actually trust both the individuals and the organisations involved?

We deliberately put those two words in that final sentence there, where we know that individuals make a value judgement on both of those aspects. They want to understand that they want to be able trust the organisation they're engaging with, so perhaps some sort of brand visibility and good reputation, but also perhaps also the individual that that organisation would put in front of you. If you go to a bank and you might trust them as an organisation, but then whoever is put in front of you, you decide actually you don't like and they don't seem to be trustworthy or paying attention to you, etc. Yeah, there's a double whammy. It's kind of two-stage process that goes through.

But this is, as I said, this is what consumers will go through throughout every single day, every single purchase, every single service or a product, you're working your way through these three distinct things. There's different balances around that. And as I said, some people apply different sensitivities to certain aspects, multiple aspects within that compared to others.

But what research shows is kind of the overall theme across the population. So for products and services generally, this is just an open question around what does value mean to you, where we'll come into the financial services world in the next slide.

For most of the population, or 41% of the population rather, it's this balance between price and quality. So getting a decent product, a decent service, it seems to be worth for a reasonable price as well. Some people apply more emphasis on one side of that price quality balance. So, yeah, you might be ultra price sensitive, in which case, sticking with our flight theme, we're sat in economy in the middle aisle's unreserved seat with a bottle of water halfway through the flight if you're lucky. Other people are much more quality emphasis, so they're up front in business class moaning about food that's coming through as well. But again, that could be different for products and services, for different products and services. It's not just going to be price-sensitive or quality throughout.

There's also quite a few other aspects which we’ll cover around this as well. Clarity of fees, being able to understand what it is you're paying and what it is you're going to get for that fee is quite important as well. But also right at the bottom here, we've got almost a quarter of the population who are saying, actually, I don't know, I don't understand. From a research point of view, that's a very high amount for don't knows. Sometimes that would indicate a poor question being answered where it's too detailed for people to understand. But in this case, it's much more that, yes - people simply don't know what it is that they're looking for in a lot of cases. And certainly that becomes the case when we go into the world of financial services.

And that doesn't necessarily mean that they don't place any value on things, but they just can't define what it is that they identify, I guess?

Yeah, exactly. There's kind of a sense in their minds that this feels like this is probably okay and reasonable, but in a lot of cases, it's areas which you want to have the understanding for, and it's more kind of going with your gut rather than, I guess, a simple formulaic such as price. Males tend to be much more price sensitive and kind of go for that side of things, but in a lot of cases, as I said, it's more kind of emotional based on that bad experience thing we talked about a moment ago rather than just, yeah, you're cheaper than I am and then let's go with that.

So, in financial services, what we did with this research was asking those questions on the previous slide, kind of open questions, what does value mean for you generally in your life? And then we also asked the same question kind of shifting towards financial services. And when we compared the data set between the two, you see a real kind of shift away from kind of price sensitivity, much more to trust, to service and performance as well. I think most people on the call will be, that hopefully sounds pretty familiar as well.

So we know that within financial services, for certain products, and again, the research will explore this in much more detail in the paper, there are certain products and services which are rates driven. So perhaps home insurance, car insurance, you go on to compare the market, you search for the cheapest premium, you might go through a little bit around kind of looking at excesses and reputation as well. But realistically, all that's going to do is take you from first place to third place on the comparison table as well.

But I guess in our world of financial services, investments, pensions, and into financial advice, it's much, much more about the trust, service, performance of the investment. And we'll come back to that as well. And also from an advice point - much more kind of relationship based. Consumers are wanting to build up a relationship with their adviser and that relationship has to be built on honesty, transparency, liability and also mixing in fair and decent investment returns to that as well.

I mean, one of the things we talk about quite a bit when at the lang cat where we're looking at some of our price comparisons that we do across the platform market, both the advised world and the direct to consumer world. If you look at the market leaders in that space, in terms of assets under administration, it's St. James's Place and it's Hargreaves Lansdowne. I think it's probably fair to say neither of those are the cheapest propositions on the market as well. If you are price sensitive as a consumer, you would go elsewhere beyond one of those companies, but what they are very good is about selling the message, selling the service that they are honest, they're reliable, they have good service quality etc and they'll also give loyalty and assurance on a long-term basis. That relationship-based service that consumers are looking for is very much brought to the forefront within their propositions.

Sticking with the advice side of things, so within the consumer research, asking consumers specifically what they want from financial advice. So this is a full representative sample of the population rather than just specifically those who have paid for a financial advice. And as luck would have it, this slide supports everything I've just said on the previous slide. So again, it's not necessarily just, it's not about ongoing returns and getting three plus inflation or anything like that as well. It's much more on that emotional experience we talked about a moment ago. So understanding how you can meet financial goals, creating a plan for the future, getting peace of mind. In some cases, that's going to be specifically planning for retirement as well. But in a lot of cases, it's just helped to sort out financial position and understand the position that you find yourself in as well.

There are some differences on the male or female side of things as well. But for most people, those are fairly marginal. Although I think on the male side, it does tend to be a little bit more specific outcome. Yeah, I want to protect my family. I want to go into/I'm thinking about transitioning into retirement. Those types of mindsets come out a little bit more on the male side of things. But again, it's very much kind of on that emotional experience side and it's heading towards a relationship-based service as well. I don't think consumers are going into an advice firm and saying, “hey, I would like to have a relationship-based service from my adviser, please,” but these types of things which they're wanting to achieve, intuitively, I think they already understand that it's not going to be a one and done service.

And actually, when we look at other aspects of the search, when consumers are faced, they encounter a product sale very, very early on in the process, that jars with what they're expecting and what they're hoping to get out of their adviser. They don't want to be sold to, they want somebody who's going to help them gain a peace of mind and to understand their financial position and then build a plan around that and their financial services, their financial lives.

And again, as luck would have it, advisers have started to have been pivoting towards that side of things as well. So this is a chart which we've conducted in a couple of places, not only the research we do with Royal London, we do similar work on our State of the Advice Nation survey, trying to understand kind of how advisers are starting to construct their propositions. We've seen a kind of gradual shift on this over the last five to ten years, starting, I guess, all the way back at RDR, makes me feel old to be able to say “all the way back at RDR” now, and even all the way back at Pension Freedoms, that's over a decade ago now, isn't it?

So ‘recent’ events such as Pension Freedoms has, again, driven consumers to wanting to have much more of a relationship-based service, and in particular, getting to that complexity of that point of approaching retirement and understanding how they can transition into retirement and into the next phase of their lives. The benefits which advisers are hoping to realise through their propositions are much, much more on the intangible side of things.

This chart here, we ask advisers to self-select on a scale of 1 to 10, where you see it between kind of full-on intangible financial planning of your client three times a year, that type of thing, all the way back to tangible pure investment returns. “I'm going to beat that footsie 250 by 3% and that's how you're going to measure my value.” And you can see really kind of shifting towards the right-hand side of things as well. There is a little bit of a kind of a reality that exists that the markets of investment returns are important, and we'll talk about that in a moment's time, but we know through kind of this shift we've seen on this chart, and also just through other data sets such as the FCA's data around the dominance of ongoing advice fees across the advice sector, it's very much kind of a service-driven approach, which is now where the advice sector is being increasingly successful operating product.

That leads me nicely onto that question of, as I said, kind of proving hopefully the last point I just made, that the advice sector is indeed increasingly successful delivering these ongoing services to clients and delivering in a way which consumers are increasingly starting to value. Just to quantify that a bit further from the FCA dataset, 81% of sector revenue now comes from ongoing fees, this relationship-based side of things that consumers are wanting to get out of their adviser when they're working with them.

We asked consumers a number of ways, consumers who are working with advisers this is now, yeah, how do you rate your advisers? These fees that you are paying your advisers, this relationship which you've gone into, yeah, are you happy with it? So firstly, asking whether you may rate it from overall value, and you can see kind of a nice tick up over three years since we first started doing this research, so some decent results on that one.

I think for those of you who have kind of a bingo going for Consumer Duty in the first mention, 22 minutes into the day we'll win that particular one. 2023 was obviously when Consumer Duty, a really genuinely recent regulatory initiative came through as well. And one of the many things that the regulator was trying to do there was to see an improvement in standards. And I think as much as the regulator perhaps would like to claim complete credit for this Consumer Duty that they have indeed seen an increase in standards over the last three years. The data set certainly does show that. There's a lot more going on to it. There was a lot more about Consumer Duty than just rating financial advisers, but yeah, it's certainly moving in the right direction.

Just one slight kind of, I guess, critical friend area to caution advisers about around that before everyone gets the champagnes and cigars out and just celebrates wildly. There is a little bit of a kind of, when we start to look at the data set through age demographics, the only age group that we've seen decrease in value, albeit very, very slight, is the over 55 age group, which we know, again, from our research, is a really, really important customer cohort for most advice firms as well.

I think within that segment, when we explore within consumers the areas which they think advisers should do perhaps a little bit better on, it's all about communication. It's all about trying to improve the understanding that's coming out as well. And maybe that's another aspect that consumer duty needs to help with as well. It's not just a case of disclosing information and sending somebody out an evaluation statement. Yeah, people want to be able to understand it and feel like they're kind of starting to learn stuff and understand their financial position as well. This relationship bit that consumers are looking for is kind of, it's two ways. They want to feel like they're benefiting, I guess, intellectually from it as well as financially. So yeah, really, good position for the advice sector to be in an improving position but yeah just the over 55s I think are just a little bit of a care case.

Yeah I mean it's an interesting one and I do know I mean I'm a big fan of the Consumer Duty I think as a cultural shift I think it was precisely the right thing to do. I know that not everybody listening to this will be with me on that but I think it is a shift and I think it moved us or is moving the industry as a whole from sort of the idea of treating customers fairly as well as to sort of going beyond that and treating them well, you know, and making sure that we understand that.

Now to my mind, advisers fundamentally know that you are closest to your clients of everybody in the chain, if you like, and you kind of know that. You already spit in the shoes of your clients to understand what's happening, what kind of outcomes they're having. But I'm not sure the whole industry has been in that place, and I include providers in that. So, the Consumer Duty was essentially trying to move us all to a place where we really understood the outcome and sort of go beyond just what we did and whether it was fair and compliant to sort of start thinking about, well, were they better educated? Did they learn something? Did they come away feeling better about things?

Now, there's a strong argument, of course, that Consumer Duty, you know, because you kind of go in fairly heavy handed, it's maybe overly bureaucratic and the regulator seems to recognise that and start to make some easements to the whole thing to make sure it's proportional, but I think culturally I don't see a change. That's what I see is the Consumer Duty continuing to press on.

Yeah definitely, It was never ever going to be a one and done exercise and it was never intended for the regulator to be that way. I think the biggest aspect of starting to just very, very slowly have an impact is the challenge I think the regulator expects all firms at kind of senior leadership level, whether that's a FTSE 100 board or senior leadership within an advice firm, it's challenging themselves, would you be happy with the service that your customers are receiving? And yeah, I think deep down for a lot of firms, the answer to that perhaps is no, but yeah, these things then take time, and if the answer to that is no, it takes time to evolve that and to change that. So yeah, it surprises me sometimes that it's been three years, but we are seeing improvements. If you look at broader consumer research, there's an improvement incentive on financial services and I guess the UK financial services sector more broadly as well, which is a hugely important thing.

So sticking with this advice, the positive message around that, a couple of other ways look at that. So the previous slide was just kind of looking at overall value. So again, asking kind of a similar question in a different way, did this actually meet your expectations? 81% in 2025 saying, yeah, net positive, yeah, at least net went beyond my expectations as well. And yeah, you can see kind of at the other end of the scale, yeah, less than 5% saying, I've worked with an adviser or hired with them and it was a bad experience, it didn't meet my expectations at all.

That's something we talk about elsewhere at the lang cat through our annual advice gap survey, which Royal London have been involved in again for the last couple of years, where there's a real kind of paradox, one of the biggest barriers for people adopting advice, paying for advice, and particularly under relatively wealthy individuals who you are thinking are kind of in the right demographic to be paying for advice is that they don't think that advice is going to be of value. So people who are paying for it see something completely different to those who are yet to experience the joy of working with a financial planner as well. So I think the more can be done by anybody involved, whether that's providers, regulators, policymakers, even small gobby consultancy firms shouting out about this stuff. The more that can be done to improve the reputation and the visibility that advisers, yet people who are fortunate enough to work with a financial planner are getting good value and are very, very pleased with the outcomes that they're their expectations were met. The more that we've done to do that, the better, I think.

And then finally about fees, looking at fees as well. So this is another area where, again, if I was being ultra critical, it's tipped down ever so slightly, but it's only marginal. If it was 1%, I wouldn't bother talking about it. 2% kind of makes me feel like I have to, but I feel a bit dirty talking about a 2% shift over between two years, and particularly where an 81% net positive was an extraordinarily good result as well. 79% net positive for the advice sector in terms of satisfaction with fees is an extremely good sector. We've tried to find other similar data if there is data to benchmark the advice profession against other professions such as the legal profession, etc, etc. And there's, I don't think there's a reliable take-out there, but I'll be astonished, particularly as I'm going through the process of buying a house and engaging with solicitors at the moment, I'll be astonished if solicitors are getting a 79% satisfaction for their fees as well. So really, really positive message for the advice sector, just to kind of summarise all of that, consumers are very happy with the fees that they are paying, their expectations are being met as well, and the overall value which they ascribe to advisers is already at a high bar and is growing.

But as I said at the start of the presentation, a large part of the value which advisers are adding is not only this relationship behavioural side of things, but there's different noise which needs to be managed. One of the things we've tracked throughout the research is looking at the impact of investment performance. Investment performance is something which is always going to be there, and again, it's very much in context to the environment that we find ourselves in. I think from memory back in 2023 when we talked about investment performance, when we started the survey, we were talking about still some post-COVID volatility. The Ukraine war was to start as well. Whereas now kind of investment performance is very much kind of whatever tantrum Trump has had and kind of the 48 hours volatility that that will introduce onto the market.

If ever there's a lesson there, I think about kind of the value of zooming out and looking at the longer term, we're definitely seeing that over recent years. But we still do see a kind of mismatch, what we’ve got here, so when we ask our advisers to what extent investment performance impacts the customer perceptions, yeah, there's still kind of a reasonable audience there saying, yeah, almost 25% saying, yeah, it has quite a big impact on that as well. Yeah, almost 1 in 10 saying it's only a very, very little impact as well. But it's slightly misaligned, I think, with the consumer side of things.

So this is advised consumers, people who are in that relationship-based advice where we talked about as well. Yeah, almost half, 43% are saying it's the most important factor. And I mentioned earlier, this is one area where we do see a bit of a male or female split starting to emerge on that 6% is certainly worth calling out around that as well. It's much, much more important on the male side of things. Only kind of 15% overall are saying, yeah, it's that important to me as well.

And that adviser message, which rightly advisers put out, and particularly zoom out, focus on the long term, focus on the plan, it can't be predicted, all of that stuff everyone within our world knows that that's the correct thing to be saying at the time, even based into these consumers who are in that relationship-based service who are no doubt hearing those messages from their advisers, only 7% of those are actually kind of fully signed up into that world as well.

Yeah, I mean, it's an interesting one because it feels like this is one we should probably interrogate further in the future where, to a degree, when you talk about investment performance, you could say, well, in absolute terms, somebody might, a client might say, “well, I'm disappointed that everybody else got 8%, I only got 7%, you know, why’s my investment not performing as well?” But equally, you can take a sort of slightly broader definition of the question, is it investment performance in a more sort of general sense? You know, “I don't really care when things are going up, but I'm very concerned when things go down.” So people might not have talked an awful lot about how they're, if they were invested entirely in gold, up until, you know, suddenly become very concerned with the dropping value of gold. Now, it's just one of those things, isn't it? It's relative, isn't it? Again, I think that definition of investment performance is probably different for different people.

Yeah, and we've not spoken specifically to consumers about that, and that's something I'd like to do if we're doing this again later on in the year. We speak with advisers on this subject quite frequently, and there’s a couple of conversations that jump straight into mind, and firstly on the point about returns, I've had a number of advisers always say to me, in some respects, they get a little bit more nervous when they're saying, great news Jamie, your portfolio has done 25% this year, because there's a danger that that kind of sets the expectation for your balanced portfolio. And yeah when it performs closer to the way it's intended to next year, you might be a bit disappointed.

But I think, again, going back to this relationship-based side of things. The second conversation we had for the most recent study, I recall an adviser saying that it becomes less and less of a problem the more conversations they have with their clients and the more times they're kind of into the life cycle of things. So particularly sitting down on an annual review, if the first annual review is kind of a reasonable range of tolerance, then the customer is much, much more likely to understand that final point there that investment returns can't be predicted. If the first annual review was right, yeah, nice to see you again. How's the last year been? And the portfolio has gone down, then that can be a bit of a tricky conversation to be having as well.

But it all goes back to that understanding side of things, which we talked about earlier, and in particular that getting the balance right between not too much emphasis on the investment side of things, but I think not completely ignoring it and letting the customer have to fill in those gaps that they might have in terms of their own understanding of sales or elsewhere.

Another area we saw, and again I mentioned at the start of the session, we conducted this consumer research right in the middle of the excitement of all of the budget frenzy that was going on in September and October last year. So for those of you who've blanked that out of your mind, autumn statement was 27th of November-ish. So yeah, September and October was peak kite-flying stroke speculation type of things.

Elsewhere in research, we were asking advisers how many advisers were having client contact out of that, and I think it was 1% of advisers, presumably he or she was on a holiday I would imagine at the time, 1% were saying, yeah, we've had no client contact on this whatsoever. So pretty much every single firm was impacted in some way. So we wanted to ask advisers kind of their overall kind of views around all of this. And yeah, I think it won't come as much surprise, but it's pretty cynical and kind of gets worse and worse through kind of each speculation life cycle that seems to happen.

It's not a political thing. This seems to have been happening for previous government, perhaps as much as the current government, but the whole kind of process around kind of speculating as to what might happen, headlines from people saying, yeah, I'm taking tax-free cash out of my pension, you should too, that type of stuff are, yeah, in a lot of cases, as the advisers said in there, almost one in five advisers agree that's not only very unhelpful, but it's potentially damaging where consumers are taking particularly, in some cases, irreversible actions around as well.

Yeah and you know not all advised clients with you know proper conversations about that in some cases, despite warning, these were non-advised customers who were doing these things. There's a difference as well, Mike, that I think was you know pretty irresponsible frankly  in allowing that speculation to continue over the last couple of years around tax free cash which is in a way if you think back to previous budgets going back a few years people would speculate that the annual allowance or the lifetime allowance or whatever was going to reduce and therefore, there was a sort of buy now while stocks last, pay more money into your pension or even ISA, whatever that may be, based on the speculation that you might not be able to do that after the 6th off any given April.

Now, I don't think many people would look back and say, well, I paid money in, I wish I hadn't. It's not the end of the world, is it, if you can afford to do it? Whereas it is quite different, I mean, people taking money out on the tax-free cash speculation sure cause a lot of people to take money out and they can't just put it back in and it does have some impact potentially quite significant impact on that kind of retirement plan so and indeed they're monetary kind of returns in some cases people took tax free cash early whereas it could have been worth a lot more had they been able to or had they chosen to wait and things had to change so if they didn't so yeah it is different.

It is yeah but think for advisers kind of like it or not really, this is a feature of the world we find ourselves in at the moment and that relationship-based service that your customers, your clients are craving, part of that will be managing the behaviours, managing the noise. And again, advisers we spoke to around this, it's I think the ones who, for what it's worth, I feel are doing it quite well there. It's an aspect they segment customers by sending them through the conversations with their clients, trying to understand who are the more likely to be reading and reacting to these types of things as well.

Moving on to the final section, this leads me nicely to some of the forward-looking statements, what the world might look like going forward. We had consumer duty bingo earlier on. The second round of presenter bingo is to mention the words AI. Again, I have to mention AI on every single presentation we're doing at the moment, so we are, what, 40 minutes, if you had that for that one.

We asked consumers for the first time on this study where AI is featuring in their worlds and not only their lives generally, but their financial lives. And this is another aspect that’s evolved over the three years we’ve been conducting this study, I'm not sure we would have had much of a response if we'd been asking these questions three years ago. So we can see here the responses, are you using AI services to help manage your finances? And if you are, how valuable are you using those as well? So across the board, 23% of the population are saying, yes, they're using things such as charging the fee, co-pilot, etc, to help manage their finances.

Most of those, that's kind of helping to make better informed decisions. So kind of about understanding aspects rather than completely outsourcing it all to the robots to take care of. But yeah, quite a decent size of the population who are using that on a regular basis.

That net yes, no, almost doubles whether that's advised clients, people who are paying for advice. But I think more realistically, that's correlated to wealth rather than necessarily whether they're paying for advice. Wealthy individuals, over half of wealthier individuals, which is defined, I think, from memory as household income above 100k. Yeah, wealthier individuals, over half of those are now using these services to help manage their finances. So these kind of something which we're kind of, yeah, as much as I joke about this being the future and cutting edge stuff, this is out this is reality now for a lot of the population.

From an adviser's point of view, we know that again, AI has gone into their firms as well. One of the areas we asked about on this was what are you going to be using for the time savings, the benefits that you're realising within your businesses by adopting AI, very much around perhaps advising more of the clients, been able to do more of what you're doing at the moment. There's also a little bit of appetite out there for kind of going after new segments of customers, new services for different parts of the population, which we'll talk about in a moment as well. I think there's also a real kind of undercurrent of, I guess, advice is taking their own medicine. They spend a lot of time talking to their clients about using financial, using their finances to create a better work-life balance and maybe work less, enjoy life more, and for a lot of advisers that, yeah, if they can make their businesses more efficient, yeah, maybe working down to four days a week rather than five… that type of thing.

But also, this area around adopting new services. So, we asked advisers in this case, yeah, do you think targeted support is a bit of a threat or an opportunity? It's a little bit, kind of, very, very unsure in the middle of this one. Again, this was the research which we conducted in the autumn of last year. Things have moved on a little bit with targeted support - We've had the final policy statement, I think Parliament actually did one of the statutory instruments last week for this as well. So targeted support is very, very close to becoming a reality now as well. So I think this is where advice firms would start to see where they sit around this.

I think targeted support is probably much more of an opportunity for firms such as Royal London, the larger providers, people who can operate it on scale. Maybe some of the stuff that's going to be next down the tracks on simplified advice or guided services might be a more direct benefit to advice firms. I think most people are seeing this as a real positive as well. There are kind of a few people who see it as a bit of a threat, but those, I think, are a little bit more of a minority. And actually, when you speak to them to understand what it is they're worried about, I think that in a lot of cases, those fears are perhaps misplaced or they're just not reflecting the reality of how the larger firms are going to be implemented in services. But again, I think we're going to see the first targeted support services coming out potentially as soon as April, April, May this year around that. So hopefully, if we're doing this research again in Q4, we'll be able to track the impact of these services as they first come to market.

Right, final slide from me. And then I think if we are able to get any questions, which I’m not certain we are by the looks of the chat, we'll be delighted to take some. And just really to kind of to conclude a couple of things really so reinforcing I think that the main message that we get around this on the value of advice side, such an important message I think to get out there. Consumers are comfortable, very, very comfortable, very happy with the value that their advisers are getting. They're getting great outcomes and they're comfortable with the level of feeds that are coming through as well.

One of the things that has also changed since November when we launched the research is not any of the spring statement, the autumn statement coming out, but also the FCA has started to do some kind of initial work to look at potentially evolving some of the rules that sit around ongoing advice and evolving it perhaps to be meeting the needs of modern consumers, meeting the needs of how consumers are wanting to engage with their advisers. I think that work feels like that should be a real, real positive for the sector, providing a core foundation to what the FCA are doing, that foundation on the facts we saw earlier, that consumers do value advice. That needs to be at the heart of what they're doing, I think.

Beyond that, I think we're starting to kind of get towards the end of the hour, so I want to leave as much time for any sort of questions that the audience might have. Beyond that, thanks for your time, I hope you've found that more interesting than walking around a drizzly grey city or wherever you are situated today.

Thank you very much, Mike. Yeah, in the absence, I think, and I don't think we have any questions, but I'll check that again in a second. Let me say, oh, I do have a question there just appeared.

Okay, so a question about Royal London's approach to targeted support. So this is the point where I wish my colleague Ben Hampton was here, who is a real champion of the subject of target support. I mean, let me say a few words about how we look at it. So Royal London, first and foremost, works with advisors, but we recognise there's an awful lot of people who are not advised for whom at the moment, based on their finances, probably wouldn't be appropriate for them to pay for advice. But that may change in the future. We look at it as a bit of a continuum. We've got young people starting out, people who are just starting to develop some wealth, and we've got people in later life who might have wealth. And we see that kind of increasing, particularly with the rollout of automatic enrolment. And as that matures, people have bigger pension funds, they've got potentially more value in their house. The need for advice will only increase. But there's a long sort of lag time for an awful lot of people whereby, you know, they probably don't need full advice, but they need something a bit more than guidance. And so we're very keen to offer something in between.

The FCA has kind of seen that approach as part of the advice gap that needs to be filled. Certainly not about replacing advice, to be really clear on that point. I don't think anybody still believes that. Advice has its own place, and the FCA is very clear on that, so our support isn't to compete that rather to think about how we offer up something a bit more meaningful with this guidance to those who would benefit from that and perhaps they go on to then take advice in future. So, I haven't answered the question, the short answer is that we're very keen to be one of the earlier doctors of targeted support which should be and we'll be making our application and seeking to apply for ability when available to do so. And I think the whole system goes live at some point after April. So, yeah, Royal London is very keen to be part of it, but in the spirit of trying to serve a population that isn't served by advisors. I can just jump a couple of extra things, Jamie.

I think from an adviser's point of view, I think they should be reassured that from the conversations we're having with providers, they're going to be very, very cautious about this in terms of not wanting to be seen to offering advice, both from a regulatory point of view, that's a pretty clear no-no from the regulatory side of things, but as you say, from a channel conference point of view, no provider's going to be wanting to be seeing as stealing adviser's clients, so they're going to be quite a number of steps back from whatever that line thinks. I think also for an adviser, as I said, for advisers, this is going to become a reality pretty soon. It will evolve and the services will evolve. There'll be some good examples, I'm sure, at first stage. There'll be lots of good examples at first stages. I think over time, I would encourage advisers to just start to think about how they would factor that into their provider selection, into their provider due diligence.

Royal London, I'm sure, will do targeted support tremendously well. If you're compared side by side versus provider X who are not doing it so well, it seems to me that advice should recognise that as part of their provider due diligence and that providers doing targeted support well should be rewarded accordingly.

Yeah, I agree.

So another question on Royal London's approach to AI and digital. I mean, we are, like every company, very keen to make the most of what both digital enhancements and AI bring to the table. I mean, AI, my kind of broad take on that is that there's an awful lot to be gained from thinking about how we use AI, but we don't, nobody wants it to be like the Wild West. And there's certainly elements of that and sort of wider sort of access to AI that we've seen throughout the population. And we need to think about how we use that in a meaningful and thoughtful, ethical kind of way. And so thinking through very carefully, where does it lend itself to best?

So while London's working with AI, we've got everybody across the business access to a large language model that assists and works with the systems we already use and kind of augments our ability to do things. And we're working through various different use cases to think about how we can do that. We're not sitting here thinking, you know, how do we sort of replace people with an AI tool to do things? It is more about thinking, how does AI augment what we do? Do the sort of really heavy lifting around data, words and interrogation of data and documents in a way that we just couldn't do with people and therefore we'll see if people can do other things and do more meaningful things and I'm sure advisers will probably look at it you know I think the same way I mean those I speak to talk about how can we deploy AI not to replace the relationship I or we have with our clients but rather how do we do some more of the heavy lifting around the stuff that takes time and adds cost to our business and ultimately to the clients that we serve.

So the short answer is we're very forward-looking with AI but we're not reckless with it. We're very careful and thoughtful about how we'll adopt it. I mean some people say AI and the various kind of models, large language models available to people now, some free, some paid for, but no matter what you do, some people say well it drives a bit of a coach and horse through the need for anybody to give guidance or targeted support or indeed even advice because it can do all those things and I think you know there may be a day where some of those things can be done I think at the moment there's still an awful lot of sort of error prone issues with it or people  not asking the right question.

I take the example if you indulge me for just a I can take the example of having seen a physio two or three times over the last few months. And I remember a conversation where I showed her the AI model that I use, plenty available on my phone, which when she described the thing I'm trying to deal with and use physio for, I can't even remember the name of it, I typed that into my large language model, chat GPT as it is and came out with a very kind of distinct plan of what I needed to do to address that to which she said to me “you know that'll take my job one day” and I said “well I only got to that place because we spent time understanding what it was that was the issue in the first place. I couldn't possibly have asked it the right question without having three sessions with you to understand what was going on”. Now that's not to say therefore that the answers right or is to say that it's a bit more nuanced. I think we sometimes leap to the idea that AI can solve everything. I think it can certainly make a big difference and it will be transformative. So it's just thinking about how we deploy it carefully and thoughtfully.

Do we have any more questions? We have lots of questions, but I will struggle a bit to read them.

“…do I see it as positive or negative value?” I mean, we're only going to do things if they add positive value and allow us to do more, you know, with the people we have for the clients and customers and advisers that we serve.

“Is there a plan to do a deeper dive into the value that employers see in the advice that they receive?”  Possibly. Good idea. We'll take that one on under advisements, an interesting one, of course many of you do workplace pensions and I'm sure and employers are a big part of this overall equation we didn't ask that question before.

 I’m just trying to read what else we've got might be different yeah I mean the whole kind of outside world landscape when that's having an impact on investments how do we keep people's trust. I mean, this is, you know, Mike alluded to this as you were going through, a big part of the challenge here is getting people used to the idea that, you know, things will change, things will come along that you don't expect and, you know, markets will respond accordingly. And we do have periods of uncertainty, whether it's a natural disaster or a kind of human-made disaster or human-made intervention or whatever it may be. I mean, it's funny, isn't it? You think about even the last few weeks and sort of imminent threat of war seemed to be of less concern to the markets than the change to the chair of the Fed in America which seemed to have more of an impact and kind of overnight kind of changed markets.

It's quite hard to predict how any of these things are going to play out and the key thing for me I guess and advisers will understand this only too well is sort of getting people used to the idea of risk and volatility and how that plays through and what it means when to be worried, when not to be worried, how it can impact you and for whom it doesn't. I always kind of think back to the young people that are getting auto enrolled that in their early 20s into workplace pensions and the best thing they can see are kind of lower markets, lots of volatility and the pound cost averaging works on that basis. But it'd be quite hard for a young person to look at that, wonder as they see markets crashing that they haven't made any money and think it's a really bad thing. But they've got essentially 20, 30 years to go. And it's actually a very good thing. So that is different, of course, in the trial of people taking money out.

So the benefit of that education and preparing people and indeed helping them prepare their portfolios is going to be the best way we can do it. What we can't do is predict what's going to happen in the world or indeed stop it from happening, it would seem. So the best thing we can do is educate people.

Mike, is there anything else that you've picked out there before we close? think we're just a couple of minutes off the hour.

No, I think the, I guess the natural thing to end the presentation on this is to think about what kind of the next coming months might add, we might not deliver. We've talked about targeted support services coming through, so we'll be looking at those and how those are implemented and when we start to see people using those, what the response to that is as well. Let's see FCAs work around ongoing advice also the stuff around simplified advice as well. So there's plenty to keep us excited, I think, and keep us interested on this going forward.

Thanks, Mike, and keep us consulted.

Okay, listen, thank you very much for those who have joined. I won't read through the learning outcomes, but just to repeat, hopefully you got some useful information from this that you can use. The final slide is just a link to get a copy of the report that was also hopefully in the chat that you can use to follow up and speak to you about that. Thank you very much for joining.

Thank you very much to Mike for coming along and yeah have a good day. Thank you.