My Biggest Mistake: All they wanted was a product they could understand

Duncan MacKechnie, 48, was a fisherman until he joined Equitable Life in 1975. He rose to become sales and marketing manager, then joined Scottish Widows in 1992 as head of direct sales. In 1997 he became chief executive of the pensions and life insurance company Direct Line Life, which was established three years ago and has 39,000 customers.

MY BIGGEST mistake was to think that financial advice was always required to go along with pension products. The key thing is not financial advice, but to make products dead simple so that people know what they are getting.

I spent 20 years at Equitable Life, and we were operating at the top end of the market. The advice we had been giving prior to the Financial Services Act was to individuals who already knew about pensions: they had identified that they had a need, and our company offered low- cost products. As a sales and marketing manager, I firmly believed the mass market could be tackled in exactly the same way. One of the reasons why it didn't dawn on me that we needed to take a different attitude was that Equitable Life always had quite a simple product in a market where people were financially aware. Most customers were solicitors or accountants, and we were saying: "You have got to have advice to deal with pensions." We really insisted on the fact that this was extremely important.

At Scottish Widows our big experience when we were providing advice by telephone was that people were not so much looking for advice, but help. We needed a much more basic approach. It was only when I came to Direct Line and we launched a pension in January 1998 that I began to think differently.

That research period was the first time I had the opportunity to attend groups and see people in the mass market who were totally and utterly confused about pensions. They just didn't have a clue. When you tried to explain to them that it was uncomplicated, they were able to counter it with lots of points.

What came through loud and clear was that you have to have a product that caters for life today. Products have to be capable of being bought over the telephone or via the Internet.

We found people didn't like penalties for stopping and starting contributions. It needed to be as basic as a bank account. We've been keen on the Cost, Access and Term benchmark, where the Government has set the standards which financial products need. This doesn't guarantee that pensions are going to perform well, but that they meet cost parameters and that you are not going to be penalised. One thing clearly brought home to me was that we couldn't get this done on our own.

We spent a lot of time last year working with the No 10 Policy Unit, saying that we needed to make products much more simple, rather than making advice available.

The insurance industry can only do so much, and it's important that these products come in a basket of welfare products. We have to work in a much wider field than just within our industry.