Cicero Policy Briefer

Issue 11, April 2007

The Democratisation of Financial Products:
What a Gordon Brown government might mean

By Iain Anderson

A Gordon Brown government will mean lots of change and it will pose some interesting opportunities for financial services.

The Chancellor's tenure at Number 11 has produced a new financial regulator, new savings vehicles, the naming and shaming of providers, price capping, a new pensions settlement, to name but a few initiatives.

His impending move from Number 11 to Number 10 will undoubtedly carry carry on this momentum of activity. The big question is: is the industry up for the challenge?

The Treasury's mantra has been to focus on the needs of lower to middle income savers—and that is a political imperative which is not going to change in any way. But surely it provides some opportunities.

My belief is that a Brown government may look to ignite some debates in the financial sector which have been unable to develop their full potential in recent times. The most obvious debate a Brown administration might look to stir is that of workplace distribution.

Brown has been supportive of the development of all worker ownership initiatives—if you like the democratisation of the workplace. There is now an opportunity to extend this philosophy much further and develop new initiatives.

Forget talk of high net worth and executive perks; providers should start to think about all worker solutions wider than pensions around protection and long-term care needs. The economies of scale at work should allow costs to be driven down for mass distribution.

Engaging with the new administration on these themes will start to earn the industry not just plaudits—but some further regulatory benefit.

Over to you, providers.

Iain Anderson can be contacted on +44 (0)20 7665 9532 or click here to email.