27 April 2012

Can't we make it simple?

I reviewed our gas and electricity supplier at home recently and experienced something of the complication and confusion which I guess that financial advice clients experience!

My objective is always to make things as simple as possible so that clients can make an informed decision about something. But I'm all too aware that I am not always successful - partly because some things just are complicated (try explaining higher rate pension tax relief, or charges levied on unit trust funds, for example!), and partly because the Financial Services Authority expect all sorts of information to be provided so that people have the opportunity to fully know what they are getting into (good in theory but for many people it just confuses them).
So it was interesting to see the amount of information and understanding I needed to acquire even to be able to compare gas suppliers. Not only do you have a standing charge and a cost per unit, but these can vary depending on how many you use, what month of the year it is, etc.. Then you get different levels of fixed prices, early exit charges, billing options, payment options, and so on. And if you add in dual-fuel options then it really starts to get complicated.

Surely there's a case for keeping things simple - I might even be willing to pay a little more for something I understand - or to have access to someone who can explain it to me!

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