Mark Polson, principal of the lang cat, an independent platforms and pensions consultancy, looks at the personal pension market and suggests a way ahead for the year to come.

As we move into 2011, pension savers have a right to feel a bit Potterish. With literally no good news stories and no end in sight, dark and difficult times lie ahead.

For those with the capacity to save a little, means-testing still bites. For all the coalition's talk of the big society and nudge theory, it's quite possible to argue that many of those not saving are following a rational economic strategy.

For those with savings built up and looking to do more, a mixture of low growth forecasts, dreadful savings interest rates and relatively high equity prices (the FTSE sits just under 6,000 as I write this) makes it hard to know where to turn.

And for those in the industry, trying to construct pension propositions that appeal to the broadest possible range of customers, the models we are used to are being blown out the water with NEST and RDR.

So how can we continue to innovate in a way that helps investors and their advisers respond to this environment?
My suggestion is that we try and collectively keep just two things in mind.

Firstly, we need to stick to what it is we do. Personal pension providers and advisers can't be an engine of social policy. Long experience tells us that it is very hard to get people who don't have any money to save it. Let us render unto the politicians the things that are the politicians' and concentrate on doing our job – which is to help people with the means to save to do so in as optimal a way as possible.

Secondly, let's get off the merry-go-round of product features and complexity for the sake of it. Instead, let's be relevant to what people really want. For ease and because I'll probably get in trouble if I don't, let's use some recent data from Synaptic to see what IFAs are filtering for in PPP product features. Top with about 60% is, er, the ability to accept transfers in. A very close second is the ability to retire early without penalty. Third is TV out without penalty. And so it goes on.

In fact, anything that scores over about 10 or 15% is what we in the industry would know as basic transactional functionality and flexibility.

My point is this. The PPP market is not about dancing on the head of a pin to absolutely optimise asset allocation for the super-wealthy. It's about providing a clean, non-toxic wrapper in which relatively basic investment strategies can be run in an administratively and tax-efficient manner. To that end, it's a surprise to me that more wrap platforms aren't hosting stripped-back PPP-style products at a reduced cost to encourage accumulation.

Platforms aside, room for product innovation is minimal in this highly commoditised market. How then can we move forward?

Well, for my money, the marketing roadmap for 2011 for providers has to be to do the basics intensely, brutally well. Every time. No-one cares about your wacky range of rebalancing frequencies (every 2nd Tuesday in April except with the moon is in the third quadrant of Jupiter) when you can't collect money, apply it and pay it back out.

And once those basics are firing, use the rest of your energy to think about how you present information to advisers and customers. Think about the ubiquity of the iPad and iPhone. The top downloads on iPad are productivity apps, not games. Why shouldn't people have a well-designed web interface that helps them understand their pension too? Look at social media sites. They're stuffed with people wanting help just to understand the basics. Use the voice of the crowd to help guide you to what matters most.

You'll find customers want pretty simple stuff – generally 'how much have I got?' and 'how am I doing?' Get the basics right, get usability to the heart of your proposition and you'll be rewarded. And if you don't want to spend the money talking to customers, look at the stats on tools like Synaptic to see what's going on. IFAs will tell you; they don't do this kind of analysis for fun, it's because it's what's important to their clients.

Sticking to the knitting and concentrating on compelling presentation will mean you'll lose from some advisers who want complexity, but this is the PPP market we're talking about. Let the 1% have their sophistication. Let the new breed of PPPs or deferred SIPPs be the product for the rest of us. And let customers & advisers access them in the way they want, when they want, in a way they can relate to. If we focus our development spend on that, it'll be the best nudge we could possibly give our beleaguered industry.

Mark Polson
Principal
the lang cat