The Financial Service Board (FSB) released the Retail Distribution Review (RDR)* on November 7th, 2014. The review is based on the framework of Treating Customers Fairly (TCF) and proposes 55 policy decisions in order to alleviate issues such as poor customer outcomes and mis-selling of financial products.
Derek Wilson, Head of the online quote and benefits comparison site, Hippo.co.za, says, “We welcome the proposals from the FSB’s Retail Distribution Review. As an insurance and financial services aggregator, we aim to align with the RDR objectives. The objective that really stood out for us was the new advice model, which aims to ensure affordable and fair advice to consumers on products and services across the whole market, enabling customers and service providers to benefit from fair competition.”
Treating customers fairly
The Internet provides consumers with easy access to information on various products and services. This has resulted in the digital world being hit by a consumer culture known as “The Switching Economy”, which places the power in the hands of the consumer by enabling them to make informed decisions in order to switch from one brand to the next. “This is the space we play in as a consumer champion,” says Wilson.
The RDR’s proposed framework of Treating Customers Fairly provides a blueprint for financial services aggregators to further empower consumers as it encourages advisers to consider an extensive range of products from a wide selection of financial providers within the South African market.
“Online financial products and services comparison sites such as Hippo.co.za help consumers utilize their power to make better financial choices by comparing quotes and benefits from a range of insurers and other financial service providers,” says Wilson, “We are aligned with the TCF framework in that our new business model aims to educate consumers on financial products and services in order to make sound financial choices.”
A truly independent advice model:
The RDR proposes interventions intended to change incentives, relationships and business models within the financial market that warrants consistent delivery of fair outcomes to customers. One such intervention is to provide a truly independent advice model. Current independent advice models allow for intermediaries to be incentivised by insurers, and insurers in turn recoup the costs from consumers.
“Our business is based on a truly independent advice model as we provide a free of charge online comparison service to the consumer, without them being charged a brokers fee by the insurer. We make money by simply charging our partners a fee when a customer chooses to find out more about their products. The results you see and the order in which they are presented are in no way influenced by the fee we charge our partners or any other factors other than price,” says Wilson.
This model ensures a change in incentive, a more competitive financial market and fair outcome to customers as per the RDR proposed interventions.
“Our business model also provides smaller insurers with greater access to the financial market. Smaller insurers who are unable to afford marketing and advertising campaigns have the opportunity to piggy back of our marketing strategies in order to promote their products and services.
Hippo.co.za acts as an independent comparison website that helps consumers,” says Wilson, “We are continually adding more and more brands to our aggregation offering such as Standard Bank, FNB, ADT and Hollard. We are always looking to add more non-Telesure providers to join the panel and encourage providers to get in touch with to discuss a possible partnership.”
Established in 2007, hippo.co.za is South Africa’s leading comparison website that helps consumers save money by comparing a range of SA providers across financial products such as car insurance, home insurance, life insurance, medical and more. Hippo is free to use and saves consumers the time and hassle of shopping around for the best deal since the Hippo.co.za website instantly retrieves real-time quotes from the different providers using the latest Internet technology. At least 8 out of 10 people could save an average of R427** per month on their car insurance.
Hippo.co.za makes money by simply charging its partners a fee when a customer chooses to find out more about their products. The results consumers see, and the order in which they are presented, is in no way influenced by the fee hippo.co.za charges its partners or any other factors other than the price of the product being compared.
For more information, visit us on www.hippo.co.za, connect with Hippo on LinkedIn, http://www.linkedin.com/company/hippo-comparative-services-pty-ltd/, like us on Facebook, www.facebook.com/HippoSA, and follow us on Twitter @Hippo_co_za and YouTube, http://www.youtube.com/user/hippocompare.
Hippo Comparative Services (Pty) Ltd is an authorized financial services provider (FSP number: 16357).
**Based on a representative market research survey conducted by Kaufman Levin Associates, on behalf of Hippo.co.za in May 2014. Risk Profile Dependent.