Our product governance process has included full ‘Value for Money’ (as it was known before the Duty) assessments for several years. When we’ve identified any value issues, we’ve introduced rectification actions to protect our customers and we are enhancing this process to meet the Duty requirements. You can be reassured, we already operate a robust process of pricing, product and proposition review.
We have also reviewed our existing value appetite against the requirements of the Duty. Our Fair Value assessment considers the whole customer proposition, looking at product, investment, service, communications and support.
To assess Fair Value, we identified how our customers can expect our product types to provide them with good outcomes and used this to identify financial and non-financial drivers of value. We then used these drivers of value to assess whether any changes were needed to our open products to deliver Fair Value. This approach was reviewed by independent consultants.
We strongly believe the review of Fair Value is an ongoing exercise and we’re strengthening our processes meaning regular assessments of product value are conducted. For open products, this includes external market benchmarking.
Value is the relationship between the cost of a product and benefits our customer can reasonably expect to get. A product provides fair value where the amount paid for the product is reasonable relative to the benefits provided. We monitor this throughout the life of our products but it only forms part of our overall assessment.
We also ensure that:
- our products and services are designed to meet the needs of the target market and sold in a transparent fashion, supporting customers in understanding the relative costs and benefits
- customers are provided with support to help them make the right decisions at the right times to meet their needs, and they can easily change or exit if the product no longer suits them
Any existing actions and initiatives identified from regular product reviews were included in the scope of our analysis and we prioritised those actions that might have a material impact on value, or customer outcomes. These actions were all completed by July 2023.
