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Beverly Chandler

Mutuals and friendly societies need higher profiles

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A new research study undertaken for the Association of Financial Mutuals (AFM) by leading market research consultancy YouGov, reveals that 33 per cent of British adults have never heard of a ‘financial mutual’ (also known as friendly societies), with a further 17 per cent having no idea what a ‘financial mutual’ is.  

More encouragingly, 33 per cent of respondents identified a mutual as an organisation owned by its members/customers, with 30 per cent recognising a mutual as an organisation where the profits are divided between members/customers.
 
Almost one in five respondents (19 per cent) say that they trust financial mutuals, with only 4 per cent saying that they distrust them – a net trust score of +13 per cent.  This compares favourably with financial PLCs (those companies with shareholders to satisfy), where only 5 per cent of respondents said they trust them; 18 per cent distrust them, giving a net trust score of -13 per cent. Members of mutuals are even more positive, giving them a net trust score of +43 per cent – the findings confirming that financial mutuals command a much greater degree of trust than financial PLCs.
 
13 per cent of those surveyed presently hold products with a financial mutual/friendly society, with 10 per cent who do not stating that they like the idea of what financial mutuals are about, and a further 18 per cent stating that they may do so in the future.
 
Commenting on the lack of awareness identified, Russell Stephens, Deputy CEO at AFM member firm CS Healthcare, a mutual friendly society and specialist provider of private medical insurance, says: “On one hand it is worrying that so many people are unaware of the benefits a financial mutual can provide.  On the other, whilst it is clear that we have much work to do in getting the message across – that as mutuals we are shareholder-free, have a greater sense of fairness towards members than competitor organisations serving shareholder interests, and tend to show a much greater focus on the longer term interests of customers – we have a fantastic opportunity to educate and engage with a whole new section of the populace.”
 
At 24 per cent, 25-34 year olds are the least likely to hold a product with a financial mutual at this time and don’t plan to in the future, but 16 per cent say they may consider doing so.  Stephens is encouraged by the fact that this grouping is alert to the many benefits which a financial mutual may offer its members, and that the opportunities such organisations may offer has not been completely lost on them.
 
He says, “We know that many younger professionals, in the earlier stages of their careers, wish to make private healthcare provision, and the AFM research study has identified real interest amongst this important segment of the population as to the benefits we as mutuals can offer.  I do not believe mutuality has been as high on the public agenda, most certainly in the world of financial services, in recent years or as it was at the height of demutualisation in the 90s, and it is clear that we need to work much harder at communicating our message – that we act solely in the interest of our members.”  25 per cent of respondents stated that they would be more likely to do business with a mutual if they knew their loyalty would be rewarded.

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