The roll-out of Aon’s Bigblue Touch offering demonstrates the power of aggregation in supporting financial capability, says F&TRC director Ian McKenna
Many people, myself included, believe aggregation services such as those delivered by Yodlee and Runpath’s All My Plans offer silver-bullet functionality to enable financial services providers to achieve far deeper relationships with customers. I’m convinced that no market is better suited to this than employee benefits.
Aon’s new Bigblue Touch (BBT) offering delivers excellent examples of putting this into practice. Bigblue Touch can identify a range of triggers for different demographics to anticipate customer needs and feed them information in advance, perhaps before the individual has consciously recognised they need it. This is designed to achieve and maintain maximum member engagement.
Using their actual spending data helps members plan exactly what their income requirements are in the future. For a millennial the service could be set to give them an update on how they are progressing on their budget half or three quarters of the way through a month, and identify a couple of savings they might want to make in the coming weeks in order to stay on target.
It’s crucial to make such services easy for users to join. Recognising this, Aon gives first-time users a tutorial where they can actually change the data in the system as they go. No watching the video first then going back and trying to remember how to do it. This is a breath of fresh air. While pre-populated with some basic data from the employer, this starts to build up a more accurate understanding of overall income and needs.
Another great example of putting aggregation into practice is the lifetime allowance tool. It forecasts forward a member’s current scheme contribution and values held in other schemes. This can include both previous DC arrangements and DB values by identifying what is the income in retirement from the DB scheme, then working backward to identify an equivalent cash value that would apply to lifetime allowance.
The system regularly checks members projected benefits. Any member whose fund looks likely to exceed 80 per cent of limit will be prompted, via the software, to explore additional and alternative ways of saving for retirement. Individuals can model additional contributions to understand if and when potentially they might exceed the lifetime limit.
One of the real strengths of Bigblue Touch is that anything identified in the modelling process as a suitable change can actually be seamlessly transacted or executed as a straight-through process. This is primarily for increases in regular contributions and there are blocks in place to prevent people creating certain types of transactions that may not be appropriate, such as DB pension transfers, unless a financial adviser has been included in the process. Overall, users identify a far more realistic expectation of their income in retirement.
This is a powerful, user-friendly service providing end-to-end retirement planning from the first job to the last stages of life. It can accommodate every pension or other investment users have ever paid into, and delivers a realistic understanding of income needs in retirement. Only by having aggregation can you deliver such a comprehensive summary of the member’s retirement income needs and their chance of achieving them. Aon argues that it is dangerous to claim to be able to deliver lifetime allowance analysis without aggregating all the information. I agree.
Users can also look at all the savings products they have created and plan their decumulation. BBT offers its own drawdown account. Further modelling tools list all contracts as potential income, show when it can be taken, project when it might end and the funds in any account.
The modelling tool takes into account any change in accumulating funds based on a partial move to decumulation. It recognises pensions are not the only source of revenue, catering for other income such as rent and Isa drawdown. Again, using aggregation, in decumulation the service analyses what is being taking in drawdown against actual spending. Links to Aon’s annuity service offer a detailed personalised annuity quote based on aggregated pensions. This is essential to be able to do a realistic analysis of annuity versus drawdown.
Bigblue continues to be the most advanced implementation I have seen of financial fitness and planning in the UK benefits market. If anyone believes they have a better proposition it would be great to give it an examination.