Understanding what drives the purchase decision in pension and investment products

The aims of this paper are to first seek an understanding of consumer decision-making when purchasing pension and investment products, and second to ascertain how this decision-making affects the consumer's choice of distribution route. The study employed both focus groups and postal questionnaire survey methods based on the framework of a classical decision-making model that investigated problem recognition, information search, evaluation tools used and post-purchase. The findings show that the decision-making process experience differed to a lesser or greater degree depending on the distribution route. The majority of respondents had recognised the need to make a purchase decision long before seeking information. Younger respondents on all incomes believed that they must make some pension provision for themselves as opposed to relying on the government's retirement provision. Many changed channels for information searches, but tended to settle with the Independent Financial Adviser (IFA). The two main evaluation tools for pension and investment were found to be the ‘charges’ and ‘historic fund performance’. The vast majority of respondents reiterated their worry that the outcomes would not be known until retirement. In terms of analysis by the level of ‘financial literacy’, respondents who scored in the upper quartile were more inclined to be on a higher income, less inclined to evaluate on charges and more proactive in discussing the investment strategy of their pension fund. Respondents who scored in the lower quartile had opposite results. One of the implications of these findings is that the younger respondents’ recognition of pension savings favours the government's intention to reverse the existing balance of pension distribution. The other main implication is that the findings will be of help to managers in appreciating the dominance of the IFA channel by providing an explanation of why consumers choose this route, and, additionally, can assist direct marketing managers in identifying customers who will be more likely to use multichannel or single-channel shoppers. It can also help the marketing manager increase the usage of different channels by addressing the factors driving the purchase decision and distribution choice.

Departmental Select Committees

The idea of departmental select committees in the House of Commons was floated as long ago as the Haldane Report in 1918 and periodically mooted by figures from both left and right as varied as Amery and Laski in the inter‐war years. It was raised again during the wartime investigations of the Machinery of Government committee, only to be shot down by the then Cabinet Secretary, Sir Edward Bridges, on the grounds that it would constrain the frankness with which the Civil Service could advise ministers. Departmental select committees were not to be introduced until 1979. Ten years ago the Institute of Contemporary British History organised a symposium to review their progress. On 31 January 1996 in committee room 10 at the House of Commons the ICBH, in conjunction with the Hansard Society, held another seminar to re‐examine the development of the departmental select committee system, its successes and failings. It was chaired by George Cunningham (Labour MP 1970–82, SDP MP 1982–83). The principal participants were Sir Peter Kemp (Deputy Secretary, Treasury 1983–88, Next Steps Project Manager, Cabinet Office, 1988–92), Douglas Millar (Clerk of Select Committees, House of Commons since 1994), Dr Ann Robinson (author of Parliament and Public Spending, head of the policy unit at the Institute of Directors [IOD], 1989–95 and Director‐General of the National Association of Pension Funds Ltd since 1995), Robert Sheldon (Labour MP since 1964, Financial Secretary to the Treasury 1974–75, member of the Public Accounts Committee [PAC] 1965–70 and 1975–79 and chairman since 1983, member, Public Expenditure Committee 1972–74, and member of the Treasury and Civil Service Committee [TCSC] 1979–81) and Sandy Walkington (head of corporate affairs at BT [British Telecom] plc), with further contributions from Peter Riddell (assistant editor: politics, The Times, since 1993), Chloe Miller, Sean McDougall, Tim King and Chris Stevens.