Virgin Money’s IGC sees red

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A simple approach


Sir David Chapman is one IGC Chair who does not promote his provider. For five years he’s been demanding an upgrade to the default fund the 80,000 or so savers in the Virgin Money stakeholder pension have been stuck in a default that hasn’t been upgraded for the best part of 25 years.

Sir David’s complaint is that it is now 5 years since the introduction of the Pension Freedoms, and thought Virgin Money and their investment manager (Aberdeen Standard) are promising an upgrade later in 2020 , the review that prompted the upgrade is now 5 years ago!

Unsurprisingly , Sir David is exasperated and makes his feelings very well known in his Chair Statement

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As if it weren’t bad enough that the fund is unsuitable for saver’s needs, it’s not doing its job properly either.

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Evidence of under-performance is provided.

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Part of the reason for the underperformance is way above average transaction charges.

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The default fund is marked with the gold background.

It is hard to see any grounds for the blockage of the IGC’s reasonable requests to have the default funds removed and replaced.

It is also difficult to understand why, once these matters were escalated to them, that the FCA did not intervene.

The restraint showed by Sir David Chapman and his IGC is remarkable, but the tone or this Statement is unmistakeable. Sir David and his committee have been badly let down. I give them green for tone and substance – no punches are pulled.


On the face of it, Virgin Money’s IGC is not proving effective, but that would be grossly unfair. I have visited Sir David in VM’s Newcastle offices and he is a force to be reckoned with.

The IGC is starved of resource (clear from the spartan style with which it is presented) , but it is right to boast that it is overseeing an operation that has not fallen over because of COVID 19

And theI GC has also been successful in achieving a reduction in fund charges with effect from January 2019. Previously charges, while within the regulatory cap, were higher than many of their competitors. They are now in line with the industry average for comparable passively managed funds.

The IGC has unusually given space in its report to allow Virgin Money explain itself Virgin Money has – since midway through 2019 been 50% owned by Aberdeen Standard (ASI) and ASI are promising improvements

Our new products, services and default strategy will provide customers with a new fund range built with the expertise of our partner ASI. As stated in our commitments in relation to Environmental, Social and Governance (ESG) factors we will continue to develop our investment approach with these in mind, with a view to including further in our future development and in our stewardship of the existing funds we manage on behalf of customers.

They had better fulfil on these promises or I suspect the FCA will be hearing more. I give the report a green for its effectiveness (in the face of considerable headwinds).

Value for Money Assessment

As far as I can make out, Sir David Chapman has failed Virgin Money’s VFM assessment (the financial equivalent of an MOT).

Whatever the reasons for the delays, his policyholders are still stuck in a 1995 vintage default fund that is no longer fit for purpose.

The rest of the VFM assessment gives Virgin Money a clean bill of heath. I don’t know if Sir David Chapman is still sending paper copies of the report to policyholders (he certainly did in 2015) but I do know he is keen to get his members engaged in what he’s doing.

So my offer to him is that I’ll analyse his data for him pro bono and give him AgeWage scores which will show just how member outcomes compare with the average outcomes they’d have got since 1995 – elsewhere.

The Value for Money report isn’t that sophisticated , but it is delivered with aplomb and I give it a green score. 

With little resource, David has achieved a powerful statement and I hope he’ll take me up on my offer.

Five year review

At one point in his Chair’s Statement , Sir David Chapman looks back over the five years he’s been producing these statements

Where we have had concerns in the past I would like to think that we have made progress although all the outcomes we have sought are not yet in place. It has been frustrating at times but we have been persistent in robustly challenging management including, of course, escalating our concerns to the Financial Conduct Authority. We have not achieved as much as we would have liked in certain areas, namely regarding the Default Strategy. Even where we have achieved changes, they did not occur as quickly as we hoped.

I hope when the FCA report on IGCs later this year, they will single Virgin Money’s IGC out for the way they have stuck to it. I hope by then , his policyholders will finally have their new default.

virgin money chapman 2

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Does Aegon’s IGC deliver “what matters most to us”?

Aegon’s IGC Chair Statement has been published , you can read it here

Helpfully Ian Pittaway and Helen Parker have a conversation on the IGC’s activities on the video. Unfortunately, video has a habit of turning lawyers into marketing people and the report is rather more robust in its treatment of Aegon than Ian’s comments might have you suppose.

Aegon are rolling out personal video summaries to members in 2020. It’s good to see a provider getting involved in delivering information in a digital format and in a way people are used to. This is more than “social media”, it is “business media”.

Watching the video is also a useful way in to the report as what you are hearing is the actual tone of voice of Ian Pittaway, who authors  what you read.

Tone and structure

Having given themselves a head-start with the video, the report sets out with bold intent

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The trouble with the slogan is in the ambiguity, is the report assessing VFM or delivering it?

What tends to happen with Aegon IGC reports has happened again and the headline splattered over the Chair’s statement is little more than a marketing opportunity for Ronnie Taylor , Aegon’s Chief Distribution Officer, who is on the IGC Committee.

And what then happens is that when something terrible happens, as is happening right now, it is really hard for the IGC to turn round and point out that something has gone wrong. What has gone wrong right now at Aegon is that the disaster recovery system hasn’t fully worked and two and a half weeks after Aegon closed its office after an employee showed symptoms, Aegon can not take inbound calls to its call centres.

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I’ve spoken to Ronnie Taylor about this and I know that Aegon are taking this very seriously- it is their most vulnerable customers who need to use phones, those who aren’t web-savvy but those worried about their savings at a time when the market is all over the place.

And Aegon are putting in place means that allow them to call you, if you ask them to

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But the bottom line, that like other large providers, the member support system has simply not coped with the disaster, the recovery system has at leas in part – failed.

So when people phone Aegon , they cannot get through and when it matters most , they can’t even get the  value of their savings.

By adopting the congratulatory tone  that characterises his Statement, Ian Pittaway compromises his capacity to admonish, he finds it hard to  support the vulnerable members because he must defend his own assessment.

During 2019,  Aegon announced plans to partner with the customer services company Atos who now provide the servicing and administration to its Existing Business customers. The report states

Aegon remains fully accountable and responsible for all Existing Business customers,

The assessment of the service levels provided by Asos suggested a green traffic light, the same traffic light given Aegon in 2018 and the IGC writes in April 2020

We carried out a detailed review of the Customer Service areas across Aegon and the arrangements that are in place with Atos to provide services to Existing Business customers. We are satisfied that Aegon is meeting the service standards you expect and pleased to see further improvement in the Net Promoter Score (NPS) which reflect how you feel about the service you are getting. Outcome – GREEN – Overall we are satisfied that Aegon is meeting your service needs and is well positioned to maintain this throughout 2020.

This is the problem with the wrong tone and I fear that the structure of the report has meant that this assessment could not be withdrawn. In my opinion, not being able to take incoming telephone calls at this crucial time is a major failure.

For all the innovation around the video , the tone of voice is wrong and  I can only give this statement an amber for tone and structure.


The IGC has been talking with employers about what they want from Aegon. We learn that

one of the key themes emerging from each meeting was the increasing level of interest in ESG matters and how providers such as Aegon take them into account in their day to day activities, their products and the funds they offer.

The IGC has also been talking  with  key members of the Aegon Workplace Distribution and the Client Service Management team to better understand the key topics that employers and advisers are raising with Aegon.

The key themes have been consistent throughout the year with employers focusing on employee engagement, financial wellbeing for employees and concerns around the impact of Brexit

The IGC  also invited 10,000 customers aged 50-65 to respond to a series of questions about their retirement journey. These were all customers without an adviser and not yet fully retired.

The responses from around 2,000 customers confirmed:

• Pension choices still confuse a large number of customers which is likely to make them defer decisions on how to take an income.

• Taking a cash lump sum and buying an annuity are the options customers are most likely to understand. Information campaigns on what the draw down of regular income means will be required to ensure people weigh up all their options and make the right choice for them.

• The majority of customers agree with helping people without advisers make an initial decision and then setting them on a default investment pathway.

I am very sceptical about all this. It strikes me that the IGC is hearing fro its various stakeholders, precisely what the FCA wants it to hear, namely that Aegon should be putting more effort into implementing ESG  , engaging the workforce in “financial wellbeing” and delivering investment pathways.

This convenient alignment between what the IGC is hearing from Aegon’s stakeholders and what the FCA wants the IGC to be doing, suggests that the IGC is 100% FCA woke

The report shows that Aegon’s IGC team have been assiduous in their duties throughout the year. But as we see, they could not get the phones answered when they needed to be answered.

I fear that though every box has been ticked, the IGC is missing the bigger picture. I give it an amber for effectiveness


Value for Money Assessment

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There is nothing wrong with this value for money assessment. For the purpose of alerting Aegon’s executive team, it tells them what is working and what isn’t (until you get a disaster that is). It shows a static position between years which is not quite born out by the narrative but suggests that there is nothing within Aegon that needs to be flagged to the FCA or to savers.

The problem is that there is nothing in this VFM assessment that communicates or engages with savers.

But the point of this assessment , as stated at the outset of the report is to give savers a lapel grabbing moment of engagement

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We know what members want, they want to know the value they’ve got for their money and that means focussing on the outcomes of all this saving. In a series of graphs, the IGC tries to explain the importance of maintaining contributions, of employer contributions and tax-relief and of increasing contributions. It is of course true that contributions are important to outcomes but they only represent the “money”, the “value” is what happens to those contributions – how they grow.

Individuals are not turned on by performance tables – which cannot translate into experienced value.

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Is this really what matters most to us?

Page after page of the report is given over to “valuable investment solutions” , but there is no point of contact with the member that could remotely be described as delivering what most matters to them.

People need to know how they did and how they did relative to others and they simply don’t get what “most matters to them”.

I give the Aegon Value for Money Assessment an amber – it aimed high but never got high.


The FCA are due to deliver their verdict on IGC delivery in the summer. This is an IGC that’s claiming to give what matters most to us. But I don’t think it does.

Instead I think it woke. It is giving us what it thinks are the right answers and it will undoubtedly tick all the boxes.

But it lacks the conviction that we find elsewhere and without the passion – it seems flat.

The report was published in the midst of the worst crisis Britain has faced since the war

Aegon are clearly going through a tough time with customer service and i wish them success in getting their telephony up and running again.

Yet in its 40 pages, its chair statement does not mention Coronavirus once.  I guess dealing with pandemics wasn’t in the terms of reference.


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“There’s life in the old dog yet” – let no-one be abandoned to Covid-19.

We are finding it much easier to talk about death in the current climate. It is not a funny subject but it becomes less frightening when we can better understands why and how it comes to us all. 

This is a blog about death, but it paints an optimistic picture of life – even as death rushes towards it. Abandoning people close to death to Covid-19, should not be part of the plan. Nor should considering those with “impaired lives”, disposable.

This is another fine piece of work from the Covid-19 actuaries, this time from Matthew Edwards. Thanks to them and in particular (my hero) Stuart McDonald for sharing what typically sits in dark corners of linked in.


Matt Edwards

Matthew Edwards- the author


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There has been comment and speculation in the media about the actual and likely future life expectancy of COVID-19 victims – often with an implication of ‘it doesn’t matter as they were about to die anyway’.

This became a perceived official view when Professor Neil Ferguson said in a recent session (25 March) with the UK Parliament’s Science and Technology Committee that ‘the latest research suggested as many as half to two-thirds of deaths from coronavirus might have happened this year anyway, because most fatalities were among people at the end of their lives or with other health conditions’.

Data on COVID-19 deaths

Deaths from COVID-19 have generally been occurring at high ages. For instance:

  • Italy: 84% of male deaths above age 70
  • UK: 93% of deaths above age 65

At these ages, it is important to note that many people will have some form of ‘existing condition’. For instance, in the UK, the 2018 Health Survey for England shows the following prevalence at ages 65 and over:

  • Hypertension: 29%
  • Diabetes: 16%
  • Obesity: 30%

These proportions are certainly not less than the proportions of COVID-19 deaths with co-morbidities reported in China – for instance, diabetes (7%), hypertension (6%). While the change in country reduces comparability, it is clear that the prevalence of existing conditions at high ages is not out of line with the proportions being seen amongst those dying from COVID-19.

Typical life expectancies of impaired lives

‘Impaired lives’ is a term used to denote people with health conditions associated with below-average life expectancy. The accurate calculation of life expectancies for impaired lives is a long established part of actuarial practice in the UK, given the importance of the ‘impaired life’ annuity sector.

For this bulletin, we have made use of a proprietary underwriting engine that calculates life expectancies for people according to age, gender, disease history, lifestyle (body-mass index, smoking habits) and various other factors. The engine was calibrated to very rich data, has been used by or on behalf of most of the UK’s annuity writers, and has been validated extensively against market data.

Using this underwriting engine, a life expectancy below a couple of years can be found only by assuming acute cancers, or other serious but less critical conditions at ages above 90, or such conditions conjoined with adverse risk factors (e.g. smoking) from the mid-80s.

For anything else, life expectancy is typically five years or more. For instance, the table below shows the life expectancy for obese male smokers for various combinations of age and disease. COPD (Chronic Obstructive Pulmonary Disease) is of particular interest in the context of a virus that kills through a pneumonia-like mechanism causing respiratory failure.

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By looking at men rather than women (men having a lower life expectancy) and considering the ‘obese smoker’ subset only of these impaired lives, this table shows a worst case scenario. But even with this extreme selection, we do not see life expectancy of below one year, and it takes a lot of ‘forcing’ the factors in the engine to find life expectancy as low as two or three years.

We should clarify, however, that life expectancy is a one-figure representation of a whole future lifetime, with mortality risk in every year. Thus, a life expectancy of e.g. five years does not of course mean you will live for five years – there would be appreciable mortality risk in the first year.

Although some of these cases would die over the course of a year in the absence of COVID-19, the growing study of frailty helps understand the process.  Severe shocks such as COVID-19 lead to deaths in vulnerable people because COVID-19 overwhelms their already impaired ‘defence mechanisms’, but without that shock these people would otherwise have continued to live.

Expected deaths from UK ICU experience in March

The Intensive Care National Audit & Research Centre’s report of 4 April 2020 on COVID-19 critical care patients and their outcomes presents a useful profile of the 2,249 patients recorded. The table below summarises the profile of these patients:



Age (mean)

60 years


73% male, 27% female

Obese (BMI > 30)


Severe comorbidities


If we take an extreme view, we can ignore the actual age and comorbidity data and represent them en-masse with the 85-year old obese male diabetic smoker considered previously, we can calculate the deaths expected absent COVID-19 and compare with the actual outcome.

In doing this, we have taken the expected first year mortality of this extreme case, increased it by 50% as a further margin (as our estimates may hide some additional material, but unknown, health variation), and assumed two weeks of potential mortality exposure (rather than the real ICU duration of 2-3 days, because that would follow a period of onset and worsening of problems). This leads to:

  • Expected deaths:   43
  • Actual deaths: 346

Note that the expected result (43) is likely to be an over-estimate, because of the fairly extreme model point used, while the actual deaths (346) will be an under-estimate as many of the 2,249 patients are still in critical care. Thus, the real Actual:Expected ratio is likely to be greater than the 346:43 ratio (i.e. a ratio of 8:1 of COVID-19 deaths to comorbidity-related deaths) shown.

It seems clear from this high ratio that the majority of deaths can be regarded as due to COVID-19, not due to other conditions.

For reference, of the actual deaths detailed in the report, only 12% were recorded as occurring in the presence of severe comorbidities (although this may underestimate the real number, to the extent that triage taking place before ICU is likely to exclude some patients thought unlikely to survive).

While it is very likely that other conditions, or unhealthy lifestyles, weaken the immune system and increase the chance of death from COVID-19, that is quite different from attributing the deaths to those other conditions.

Other perspectives

As with much work on COVID-19, this particular question cannot be answered fully and precisely at the moment. The strongest case we have seen for the ‘they would die soon anyway’ position is based on use of Bayes’ theorem. Sparing readers the details, this allows us to look at ‘probability of COVID-19 causation given death’ from an assumption about ‘probability of death given COVID-19’ (i.e. the case fatality rate, ‘CFR’), along with equivalent probabilities of deaths from other causes. If the CFR is very low compared with the ‘other causes’ probability of death for an individual, it follows (via Bayes) that their death in any year can be attributed largely to natural causes, not COVID-19.

Overall, given the arguments already noted, we do not feel that this approach justifies the assertion that the majority of COVID-19 deaths are of people who would have died soon.

The question will not be fully resolved at a population level (as opposed to the perspective of individual cases) until we are in a position to compare total deaths over a reasonable period against total deaths in the same period in previous years. Some work has been done following this approach in the Bergamo region of Italy, and also parts of Spain, showing recent mortality to be of the order of 2.5x (Spain), 4.5x (Northern Italy) what was expected given the experience of recent years. Equivalent UK data to allow a meaningful comparison are not yet available.

The EuroMOMO data will be an extremely useful resource for these comparisons.


Actuaries are able to provide well-based advice in the context of life expectancies, given our extensive experience in this area.

While the impact of COVID-19 may seem to be disproportionately associated with chronic health problems, consideration of both the age ranges affected by the disease, and the fact that only a tiny fraction of impaired lives have life expectancies of the order of one year, makes it seem unfounded to claim that a large proportion of the COVID-19 deaths of 2020 would have died in any case this year.

As well as this being false, this claim is dangerous from a public health perspective if it encourages a ‘so why should I care’ attitude, thus endangering adherence to Government policy on social distancing.

7 April 2020



2 ISS statistics as at 26 March 2020






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Precisely right – Scottish Widow’s IGC

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Mark Stewart- IGC Chair

Mark Stewart has issues his first Statement , having taken over as Chair of the Scottish Widows IGC. You can read it here.

It is brief , accurate and it has a distinct tone which I like. The contents page sets out its scope.

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The question is , can Scottish Widows IGC do in 22 pages, what others struggle to achieve in 70? Inevitably there is not the granularity in this report of Phoenix or Standard Life’s, nor the folksy charm of Zurich’s, nor the assurance of Royal London’s. What we get is precision and incision, brevity – not levity. The report generally succeeds.

Tone and structure

The precise tone is achieved through consistent vocabulary – he uses an old school vocabulary – talking not of members but “customers”. He talks of “computer system”s not platforms and avoids jargon by referring to legacy books as “old” and the new ones as “modern”.  He actually uses language to take difficult ideas away from the office and into people’s sitting rooms. This is an art.

Where detailed analysis is required – such as the assessment of Scottish Widows “premier portfolios”,  the narrative is clear and the conclusion dry

“with variations in performance since 2015 ranging from -0.6% to -1.7%. The IGC will continue to monitor the relative performance and value for money of the Premier Portfolios”

The tone is never effusive which allows the report to keep an acceptable distance from the IGC sponsor. This allows us to accept the IGC marking its own homework when it praises Scottish Widows’ governance, independent as the IGC is, it is a shop window for what goes on inside and this report is a credit not just to the IGC but to Scottish Widows. I give it a green for tone and structure.


The IGC are no spring chickens with only Ciaran Barr (of the independents) not in bus-pass territory. “Experience” appears in many profiles and I worry how effective the committee can be in understanding the needs of younger savers. I have in previous years criticised their statement’s tenuous grasp of  ESG as something embedded in the investment proposition, rather than as a  vegan – sideshow. Three out of the four independent members are alumni of Willis Towers Watson, which doesn’t say much for diversity and runs the risk of “group-think”.

Where the report shows the IGC as effective is in the traditional areas of funds, administration and governance. The section on “engagement” lacks conviction and here the “old school” feel of the report does not give space to innovation. There are some real strides being taken in the technology space, especially in the engagement of savers with their investments , I suspect that the appointment of a young CIO at Widows is a recognition of the need to get with the times.

With that gripe, I get the sense that the IGC really know their stuff on Scottish Widows product. Apart from the old and modern Scottish Widows products, they have the “new” Zurich book to oversee. The IGC seem rather underwhelmed by this acquisition and it will be interesting to see the results of this tart warning.

Some service targets were not met during the year. We do expect the service level to improve following investment in systems and staff.

Despite my reservations over the IGC’s current composition, I sense the authority of their commentary. I think this report shows the IGC as effective and I give them a green (though David Hare would have tinged his colouration)

Value for Money Assessment

The origins of the approach adopted by Scottish Widows is in the Pension Regulator’s original breakdown of VFM into five measures. Scottish Widows do not go so far as to weight these measures to provide a balanced scorecard and an overall score (an approach that is adopted by other IGCs).

The simplicity of their approach means that they can easily demonstrate what is working and where and I found it very effective

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It is effective if you are considering purchasing a Scottish Widows product , or if you are a regulator , or if you are an adviser. But it isn’t very engaging for ordinary members and frankly neither is the conclusion drawn by Mark Stewart

  1. Scottish Widows modern product is best unless you’ve got
  2. An old Scottish Widows product with guarantees you’re going to use
  3. Zurich gives best outcomes but there are dark warnings about “disruptions fo future service”

Zurich also gives an integrated drawdown product , a self investment option and better self service but the IGC are clearly very far from endorsing Zurich over the old Scottish Widows product (yet).  Hopefully this will give Scottish Widows a boot up the **** to get the Zurich “platform” in play for later this year.

Which brings me to my one major beef with the report, which is that it really doesn’t have a way of talking to members – most especially about the value they are getting individually for the money they’ve entrusted for decades to Scottish Widows.

I am already getting stick from IGC Chairs for banging my own drum but here I go again.

Saving customers are interested in their experience, not the generality of experience. They want to know how their pot has done both against what they could have got from  the bank and what they could have got elsewhere. In other words they want to see their individual rate of return and they want it compared (benchmarked) against how others did.

I hope that an outcomes based measure will be incorporated into Scottish Widows reporting in 2020-21 so that members not only have the chance to see how they did collectively , but test how they did individually.

Since the value for money assessment is limited to the top-down opinion of the IGC and has no quantitative analysis of member’s experienced outcomes, I’m not giving it the green I gave the statement for tone, structure and effectiveness – I’m giving it an amber.

Precisely right

If I was a customer of Scottish Widows (which I’m not), I’d have read this report with a fair amount of confidence that the insurer was going in the right direction. Clearly there are issues around funds and fund reporting and not just in terms of my moan about VFM. Scottish Widows got into a mess when parent Lloyds Banking Group fell out with Aberdeen. Frankly, since Scottish Widows sold SWIP there hasn’t been a strong hand on the investment tiller and fund reporting and governance are its weak spots.

On this, as on most matters, the IGC is precisely right and I’d like to thank them for a mercifully brief report that was good to read.

The proof of the pudding is in the eating. How Scottish Widows survives the pandemic is the test. So far so good – if the following section is good to go by.

Finally a word on Covid19

Scottish Widows is keeping its telephone helplines open to members. I made inquiries about this of IGC member Jackie Leiper and got the following response.

I have been updating the other IGC members twice a week on COVID-19, they have been to see the comms we’re using to support customers especially scheme members and as you say, we’ve worked extremely hard to maintain service over this period with our entire workplace team now working completely from home including telephony.

We had a fairly seamless switch over in Cheltenham having prepared well when disconnecting from the Zurich platform second half of last year, that disaster recovery planning has served us well.  The Edinburgh teams have had more challenges as less colleagues had laptops however we did have a home working pilot in flight that has been running so all of our systems had been adapted to home working so with some exceptional commitment from colleagues coming in to office to cover critical services until laptops appeared, I am delighted that we have been able to maintain a strong service with only a couple of lost days where we had to unexpectedly evacuate buildings


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Member support: beyond the trustee’s pay-grade?

Pension support

Some people need their money now


The Pensions Regulator and the FCA have delivered guidance on how those with charge of other people’s money, should behave at this time.

I was particularly pleased to see the Pensions  Regulator’s guidance on administration. Pensions are, as far as most people are concerned, about being paid a wage in retirement. The pension administrator is most important at a time like this, although administration does not come into the regulatory perimetre, protecting member’s interests does.

But the question remains, who is responsible if things go wrong? If administrators see standards falling as they lose people to illness and productivity to home-working does the buck stop with them?

The same can be said for the  IGCs and GAAs who from today have responsibility not just for workplace saving but for the payment of those savings back. The FCA’s PS19/30 gives the IGCs and GAAs responsibility for ensuring value for money from the investment pathways that were due to be in place by August (though this deadline may be  slipping).

While trustees of DC pensions (especially the authorised master trusts) do not – yet – need to offer such options, there is a clear obligation in the title “pension trustee” to make sure money can find its way back to the individual saver as requested. This may be via a third party (which offers all the options under pension freedoms) or it may be directly.

In short, the payment of claims on our pension savings – for whatever reason – are a matter of supreme importance to pension provision.

I am therefore shocked that one of our major pension providers, Legal and General, has closed its member helplines so that we can no longer call our provider in emergency.

I am sorry to see that Aegon have also adopted this position


This is in  contrast to others. This is Royal London’s web promis

Phoenix and Standard Life are also keeping their lines open (though they are trying to preserve capacity for the vulnerable. This is posted on their websites.

Our priority is to ensure we provide a telephony service to our more vulnerable customers and therefore if your need is not essential, we would appreciate it if you would contact us via the online enquiry form.

Scottish Widows put out this statement on their contact page


Aviva are also taking calls , making this statement on their Coronavirus faqs

As the coronavirus outbreak continues, we’re doing all we can to support you while keeping our people safe. With fewer colleagues on hand and an unprecedented number of calls coming in, we can’t speak to as many customers as we’d like. And because we’ve had to reduce our opening hours, we’re also taking longer than usual to reply to letters and emails.

Aviva give a different answer for inbound calls to their retail platform – indeed you can read how eight other businesses are facing the challenges of the pandemic by clicking this link to some research by Citywire

There is clearly a marked difference between service levels from our major pension providers to customers needing urgent help.


Pensions are paid to people who are getting old and the old are some of the most vulnerable members of society. The old are the people who have least familiarity with online self-service and most use the telephone.

It is critically important that firms who operate member support services, whether insurers, SIPP operators or third party administrators employed by trustees – keep these telephone lines open.

This is not beyond the trustee’s or the IGC’s pay-grade, this is at the very heart of what your fiduciary duty is – you are there to protect your members and while we do not expect you to answer these calls yourselves, we do expect you ensure that somebody does.

Beyond (or under) your pay-grade?

This is not something that can wait a few weeks till the next Trustee or IGC meeting, it is something that should be reviewed today (Monday April 6th).

Member support is not above the trustee’s pay-grade, nor under it for that matter. The closure of telephone helplines is an immediate issue for  the IGCs and Trustees of the L&G and Aegon contract-based plans and multi-employer trusts.

But how many more pension administrators are looking at these huge providers and taking them for an example?


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Standard Life IGC – will engagement drive innovation?


Standard Life has published its 2019-20 Chair Statement.  

Standard Life are now part of the Phoenix Group who have rationalised their two  IGC committees removing the Standard Life IGC personnel and replacing them with Phoenix’s established team, under the Chairmanship of David Hare.

Phoenix has already subsumed the Abbey Life IGC and is about to welcome a third IGC to its fold in ReAssure. Look forward to further consolidation as it looks unlikely that I will be reviewing three reports again next year! Perhaps an indication of the direction of travel is in the mailing address if you want to comment on this Standard Life report

Necessarily the Standard Life and Phoenix reports often replicate each other, certainly in terms of tone and structure, but also in the value for money methodology and in much of the work the IGCs plan to do in 2020-21.


IGC Chair – David Hare


Tone and structure

The IGC Chair Statements this year are being published in the midst of the Coronavirus pandemic. The gravity of the situation is recognised in the report both in the member summary and Chair’s introduction.

The Standard Life IGC statement is split between the bit the IGC think members should read and the much longer bit they might like to read, if interested. The bit you really should read is on the link at the top of this article

You have to click through to read the full 2020 Annual Report. using this link to read the detail. I found this approach worked well and meant that I could see the bare bones of the statement  on a single screen with multiple expanding buttons taking me where I wanted to go. This is a big advance.

In his  Chair’s introduction, David Hare focusses on the issue of “getting read” and focusses on the FCA’s new requirement on IGCs to monitor member communications

Screenshot 2020-04-05 at 07.03.02

Hare asks

.. is a document fit for purpose if it is not sufficiently engaging as to encourage readership by a significant proportion of scheme members, even if it contains all the right information?

I am pleased  that Standard Life’s IGC’s Chair’s statement encouraged me to read it but at nearly 80 pages it was too long (especially the member engagement section).

Nonetheless, the report was a rigorous read, often challenging and though-provoking. In terms of tone and structure I was impressed and give it a green – being the best accolade I can give it.



The acid test of a workplace pension is how it treats its customers – all its customers. I have had cause to call out Legal and General for failing its vulnerable customers , the same cannot be said of Standard Life. They continue to offer a level of support to everyone – both through well organised web-pages and through a live telephone help-line.

We appreciate your patience during these exceptional times. We’re following government advice on home working to look after our people so they can continue to give you the best possible service.

Our priority is to ensure we provide a telephony service to our more vulnerable customers and therefore if your need is not essential, we would appreciate it if you would contact us via the online enquiry form.

This is reasonable and validates the IGC’s statement that

We have been very impressed at the speed of planning and implementation of new operational processes, in order that all possible steps are taken to ensure at least the most important needs of customers (particularly the payment of benefits) can be met in even very extreme scenarios of potential Covid-19 impact.

Throughout this report there is evidence of the effectiveness of the Standard IGC committee. It is critical of much it finds.

There are lower levels of satisfaction from customers that they have the information they need to make decisions on their pension and investments.

  • The IGC will continue to monitor Standard Life’s position on the 117 plans that have death in service benefit, including its review of the level of charges for this benefit.

  • The IGC has been disappointed at the time it has taken in order to give us a full picture of this important area (transaction costs).

  • IGC disappointment at lack of visibility of how ESG considerations impact in-scope members’ funds, despite repeated requests from the IGC


Performance reporting ; Standard Life were given a clean bill of health from Redington (the IGC’s investment consultants). This was principally because most of the Standard Life funds offered took out their exposure to GARS. GARS is an absolute return fund that found that in taking diverse risks off the table, it missed the chance to capture market growth through the long bull run since the 2008 crash. It would be sad if the protection GARS was designed to give people in falling markets, had been removed at the point when markets fell.

Screenshot 2020-04-05 at 10.46.11

My concern for an over-reliance on the kind of metrics offered by consultants is they tend to be reactive and can precipitate the kind of behaviours that , were they found among amateur investors, would be considered dumb.

in short I find the conclusion drawn is unrealistic

This year’s matrix assessment produced a score of 38 out of 45 (84%) against last year’s score of 24 out of 36, which is 67%.

The performance reporting and analysis cannot change that much in a year. I fear that the value assessment is as volatile as the markets

The most effective way of benchmarking that, is to see what internal rates of return were achieved on individual pots. I will return to this theme in the next section.

Customer Service; It is good to see the IGC pushing for the publication of the results of internal service levels rather than the antiquated public ones. Pressure on these levels is coming from customers (I suspect employers) and the IGC is right to respond to it.

I have to admit that having the lengthy analysis of Standard Life’s benchmarking surveys , I am none the wiser as to whether Standard Life are doing better or worse than in years gone by , either in relative or absolute terms.

Customer engagement: the report spends over 10 pages labouring over Standard Life’s various engagement initiatives, concluding that Standard could do better but that things were moving in the right direction. Standard Life is pioneering advice at retirement through its network of advisers. The danger of this is that in the hurry to get the messages it wants to get to their customers, it forgets to give customers the information it wants from Standard Life. The report makes this point very well.

“although statistics of customer satisfaction with communications are strong, there are lower levels of satisfaction from customers regarding the information they need to make decisions on their pension and investments”


Costs and charges; the analysis of the 544 unit linked funds offered by Standard Life suggests that Standard find getting the data from fund managers , easier than Phoenix (for whom there are still significant gaps in reporting. This suggests that fund managers don’t see all platform managers as equal (something Phoenix may want to think about as it continues to grow. There is little to say about the work Standard and the IGC has done but to praise it.


Standard Life and the Pensions Dashboard

It’s surprising, considering the amount of the report devoted to engagement, that the IGC has not made more of the Government’s initiative to launch a pensions dashboard. With its emphasis on being the open bit of the Phoenix empire, Standard Life has more to gain from people using a dashboard to find and aggregate pensions.

Perhaps in 2020-2021, the IGC could look at this in more detail

Summing up the effectiveness of the Standard Life IGC in 2019- 2020, I give them a green, my highest level of scoring. This is an IGC that takes it very seriously.


Value for money

Here is the VFM assessment – the 93% score compares to an 89% score for Phoenix

Screenshot 2020-04-05 at 10.10.08

The only area where the scoring differed was in costs and charges (Where Phoenix scored a 12 rather than 16.

I find this surprising as Standard Life has a quite different investment proposition and operates customer service from a different unit. While I can see it is possible that the management culture and risk and governance frameworks of both organisations have been merged, I think this is unlikely. I have visited the offices of Standard and Phoenix recently and sense that in many ways, they are quite different.

I suspect that there is a spurious accuracy about the results of the balanced scorecard and that the calibration is wrong. Can we see both propositions as approximately top decile? If there is any kind of benchmarking going on, then what does bad look like?

I was pleased to read that the Standard Life are prepared to change their ways of measuring value for money. This is happening already with the qualitative approach previously being adopted by Phoenix being supplemented by the more quantitative approach pioneered by former Standard Life Chair Rene Poisson.

But I am not sure that the current VFM assessment carried out by Phoenix or Standard Life properly passes Hare’s own sniff test.

…is a document fit for purpose if it is not sufficiently engaging as to encourage readership by a significant proportion of scheme members, even if it contains all the right information?

When talking of the IGC’s aims, Hare tells us

We are also keen to do what we can to help increase the level of engagement between customers and their pension

I need no second invitation. Savers want to know how their money has done, they want to know how it has done as their rate of return and they want to know how it has done relative to other people.

While Hare is keen to benchmark other areas of Standard Life’s  delivery by way of participation in industry groups, the report does not evidence any work on benchmarking the experienced returns of savers, nor how these returns compare with other groups of savers (even Phoenix).

Until I see evidence of outcomes based testing , I will continue to criticise the VFM assessment of Standard Life as failing to engage customers with their pension and the report for containing all the right information but not getting read.

I give the report an amber for its value for money assessment. Notwithstanding this mediocre rating, I am pleased to see the strong words the report contains for fund managers taking two years to provide the numbers for the cost and charges assessment.

I am also pleased to see that the application of ESG principles makes it into the value for money assessment. Standard have clearly got a way to go on this and the relatively low score holds back the whole score from approaching perfection

No doubt David Hare will be pointing this out to Standard’s management. There is much that a funds platform can do to engage members in the ESG management of underlying funds . I hope that David Hare will make sure that Standard Life incorporates market developments which enable transparent viewing of the underlying investments within funds and encourage member engagement and participation in the enforcement of ESG at stock level.

Again I’d hope to see Standard Life’s obsession with member engagement driving innovation, there are clear links between engagement and improved contribution levels.

standard life old

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How modelling helps us understand and deal with the pandemic.

Screenshot 2020-04-04 at 07.26.22


Fighting this COVID-19 pandemic requires a good grasp on how the virus spreads, impacts health care demand and could be managed. This bulletin highlights some examples of how mathematical modelling has contributed to the understanding and intervention of this pandemic, “the health crisis of a generation”.

Slowing down the spread of the virus is central to international policies. A common measure for the spread of a disease is the average number of people who will catch a disease from one infectious person, the reproductive number R. If R is greater than 1, then the disease is expected to spread. If R is less than 1, the disease will become extinct. This has been used to define policy objectives, for example whether the policies aim to reduce R to a lower level, but above 1, to slow transmission or to aim to reduce R to below 1 to end the epidemic (Ferguson et al., 2020).

At the start of a new outbreak, there will be much interest on R in an environment when the whole population is susceptible to the new infectious agent. This is the basic reproductive number R0. The higher the R0 above 1, the faster the disease can spread.

Early outbreak

During the early stage of the outbreak in January 2020, much effort was put into estimating R0 of COVID-19 to understand the nature of transmission and enable further modelling. However, R0 is a calculated number requiring estimates on the duration a person can be infectious, in contact with people and the likelihood of transmission when in contact. Liu Y et al. (2020) reported that there were 12 studies that published R0 for COVID-19 between 1 January and 7 February 2020. All the studies agree that R0 is greater than 1, implying that the virus will spread. This finding when combined with statistics on demands for intensive care and death prompted drastic measures to contain the virus in China. However, the range of R0 of about 1.5 to 7 is wide. It is important to note that there is uncertainty around this figure. Models that uses R0 in China as an input, such as Ferguson et al. (2020) and Danon et al. (2020) will need to know how the wide range of estimates would affect outputs. 

Epidemic in China

Modelling has been used to better understand how the spread of COVID-19 changed over time in the epicentre of the outbreak in Wuhan and how the virus might be ‘exported’ from China to other countries. Kucharski et al. (2020) reported that the median daily reproduction number dropped from 2.35 a week before travel ban on 23 January to 1.05 a week after, suggesting travel bans have a rapid effect in slowing spread. The authors also estimated that it needs only 4 cases in a new population to have more than 50% chance of starting an outbreak, highlighting the importance of tracing newly infected cases and border control. However, attempts to contain the virus through tracing and isolation. A model suggests that we must trace and isolate 8 in 10 contagious persons introduced to a new environment susceptible to the virus to be 40-90% successful in avoiding a COVID-19 outbreak (Hellewell et al., 2020).

Given the severe financial impact of the epidemic in China, attempts have been made to model when the epidemic would be under control in China following different interventions. For example, Liu et al. (2020) considered ‘the unprecedented strict quarantine measures in almost the whole of China to resist the epidemic’. They concluded that the epidemic would peak in February and be controlled by the end of March, 2020 with stringent lockdown in China. At the time of writing at around end of March, the epidemic is indeed under control and lockdown measures are being lifted in parts of China. However, China is now worried about potential waves of new outbreak from imported cases from other countries. New cases, possible flare ups, are indeed being detected in China as shown in the following new case time series since 1 March 2020:Screenshot 2020-04-04 at 07.25.54

Tableau Public based on Johns Hopkins University dataset


By mid-February COVID-19 had spread to some 25 countries but pandemic wasn’t declared by the WHO yet. There were concerns that COVID-19 may overwhelm health care systems in countries with less comprehensive public health facilities in the African continent. Gilbert and co-workers (2020) estimated the risk of ‘importing’ COVID-19 from China into Africa, by examining the volume of air travel flying from various infected provinces in China into Africa.

The authors identified Egypt, Algeria and South Africa to be at high risk of importing the virus, while their public health systems have moderate to high capacity to respond to outbreaks. Nigeria, Ethiopia, Sudan, Angola, Tanzania Ghana and Kenya have moderate risk of importing COVID-19. They have variable health care capacity and are relatively vulnerable to consequences of a pandemic. By matching countries at risks of importing the virus and their capacity to cope, resources can be prioritised. The researchers proposed ‘Resources, intensified surveillance, and capacity building should be urgently prioritised in countries with moderate risk that might be ill-prepared to detect imported cases and to limit onward transmission.’


On 11 March, WHO declared COVID-19 to be a pandemic. The next day, the UK announced that the government would change tactics from trying to contain the virus to delaying spread, but without rules on social distancing, in contrast to lockdown measures in China and Italy. On 16 March, Ferguson and colleagues (2020) released the results of their modelling of the impacts of potential interventions on the spread, intensive care demand and deaths related to the virus in the UK. They concluded that, without interventions, the UK could expect to see 510k people killed by the virus in 2020. For context, total UK deaths in 2018 was 616k. They considered 2 types of strategies: Suppression and Mitigation summarised in the table below.




Reduce average new infections generated by each case, called reproduction number R to below 1.

Reduce health impact, not to interrupt transmission completely.

End result

Reduce case numbers to low levels like SARS or Ebola, for as long as possible or until a vaccine is available.

Herd immunity. Population immunity builds up, leading to rapid decline in cases.


Case isolation. Household quarantine. Social distancing: 70+/ all. Close schools. Combination.

Similar but without social distancing for all.


On-off 2 thirds of 18 months. 

5 months but risk a come-back in winter, as the population would not have achieved herd immunity.

3 months.


6-120k over 2020 and 2021, depending on scenarios.

250k in 2020

The model proposed that combined interventions of isolating symptomatic cases and their household, social distancing of the whole population and closure of educational institutions over 5 months would suppress the number of people needing critical care beds to be within capacity at each point in time. However, this risks a come-back of the virus to crash critical care capacity in the winter of 2020, as the population would not have had the required immunity. The authors suggested a scenario where the suppression strategy is implemented over at least two thirds of 18 months, with school closure and social distancing triggered on-and-off by critical care capacity, with the other policies being in place.

Their results highlighted the severity of the pandemic on the UK and urgent actions were needed to avoid a catastrophe. As number of cases and deaths continued to rise, the UK subsequently introduced school closure and social distancing measures. By 23 March the UK was under lockdown with rules including the banning of gathering of more than 2 people in public and people should only leave their homes for essential activities.

With a high proportion of infected people displaying little or no symptoms, the lack of a blood test to confirm how many people are indeed infected is problematic to modelling.

For example, without the number of people infected, we would not know if the proportion of infected at risk of severe disease is 1 in 10, 100 or 1,000. Lourenco and colleagues (2020) showed that this uncertainty could lead to a wide range of estimates for the percentage of people infected and immune in the UK, ranging from 5% to 70% by around mid-March.

This has an important policy implication. If the population is, say 70% infected and immune, no stringent measure is needed because we have achieved herd immunity. If it is only 5% immune, then the UK has challenging days ahead and the lockdown is essential. 


A wide range of mathematical models, designed with different purposes and features, have played important roles in understanding the nature, projection and management of this COVID-19 pandemic. They have informed policies to contain and delay spread.

However, the inputs, processes and outputs of the various models are subject to uncertainty and limitations. This means that we need to treat the results carefully.

Members of the Actuarial Profession are tasked to manage pandemic risks in insurance or reinsurance firms. It is important that the profession is at the forefront of understanding and modelling pandemics.

We recommend that the Institute and Faculty of Actuaries:

  1. Ensures it has access to international thought leaders in the area of pandemic modelling. This may be done through collaborative research or appointing eminent leaders in this field to be honorary fellows.
  2. Creates opportunities for members to learn and network with experts from other disciplines that involve in pandemic management.
  3. Encourages members to engage with international modelling community by sharing models, expertise and experience.

March 2020


Danon, L. et al. (2020) ‘A spatial model of CoVID-19 transmission in England and Wales : early spread and peak timing’, MedRxiv, pp. 1–10. doi: 10.1101/2020.02.12.20022566.

Danon L, House T, Keeling M. The role of routine versus random movements on the spread of disease in Great Britain. Epidemics [Internet]. 2009; Available from:

Ferguson, N. M. et al. (2020) ‘Impact of non-pharmaceutical interventions ( NPIs ) to reduce COVID- 19 mortality and healthcare demand’, Imperial College COVID-19 Response Team, (March).

Gilbert M et al. (2020) Preparedness and vulnerability of African countries against importations of COVID-19: a modelling study. The Lancet.  VOLUME 395, ISSUE 10227, P871-877.

Hellewell J et al. (2020) Feasibility of controlling COVID-19 outbreaks by isolation of cases and contacts.  The Lancet VOLUME 8, ISSUE 4, PE488-E496.

Kucharski A J, et al. (2020) Early dynamics of transmission and control of COVID-19: a mathematical modelling study. Lancet Infect Dis

Liu Y, et al. (2020) The reproductive number of COVID-19 is higher compared to SARS coronavirus. J Travel Med 27 (2) doi: 10.1093/jtm/taaa021

Liu X, et al. (2020) Modelling the situation of COVID-19 and effects of different containment strategies in China with dynamic differential equations and parameters estimation. medRxiv preprint doi:

Lourenco J, et al. (2020) Fundamental principles of epidemic spread highlight the immediate need for large-scale serological surveys to assess the stage of the SARS-CoV-2 epidemic. ‘Oxford Paper’.

This paper is part of a series of articles published by kind permission of the Covid 19 Actuaries Response group.

Thanks in particular to Joseph Lu for helping us look into the actuarial science that helps insurers and the more general public – understand what is going on.

Joseph Lu

Joseph Lu – the author

Posted in actuaries, advice gap, coronavirus, pensions | Tagged , , , , , , , | 1 Comment

IGC reports “good to very good”- as L&G closes member helpline.

Screenshot 2020-04-04 at 16.57.33

Dermot Courtier – IGC chair


L&G’s IGC has published its fifth report for savers ; here is the link  for the 2019-20 statement.

March must have been a difficult month for Dermot Courtier , the L&G IGC.’s chair

Clearly the report wanted to say goodbye to L&G’s legacy book to ReAssure, this deal was announced in 2017 supposed to complete in 2019 and has now been put off indefinitely because of the current pandemic. There is a lot of “nearly there” about what is happening at L&G at the moment.

  • The workplace pensions unit is piloting an app but this is still not generally available
  • The workplace pension plan has a new default (the Future World MAF) but it’s not the default default – employers will have to make a conscious decision to adopt it.
  • There are currently 10 self-select funds in special measures but we aren’t told which they are.
  • The IGC undertook a benchmarking survey with other IGCs – but the results are not published.
  • There is no mention of systems developments, there appear to be no plans to  extend the Bravura platform to workplace pensions
  • One of the IGC’s principal jobs for 2020, oversight of the introduction of the investment pathways, is no longer required by the FCA as a result of the pandemic.

The IGC statement is full of what the IGC got up to, but tells us very little about what is actually happening.  L&G workplace seems to have spent another year “consolidating”.

The IGC and the current pandemic.

But L&G is now faced with a challenge

At the time of the statement , information that appears on the L&G workplace member portal in a blunt fashion

Screenshot 2020-04-04 at 16.03.39

In case the print is too small – let me repeat

In these difficult times, we’re doing what we can to look after our customers and our employees. We regret that we’re unable to operate our normal helpline service and our phone lines are closed until further notice

You can reach L&G by secure message or email (though there is no mention of response times). Death and health claims can be made to . The implication is that other “claims” are not sensitive. The language is insensitive.

The links from this statement are helpful but it is simply not good enough for a major insurer to have no telephone helpline. Those who are not online cannot  send secure messages or emails. those who have urgent needs cannot speak with an L&G member of staff. The people who need the helpline most are L&G’s most vulnerable customers.

Bearing in mind the drastic measures being put in place by L&G’s investment arm (LGIM), having no one to speak to – is not good enough.

Screenshot 2020-04-04 at 16.04.18

This report has been published at a time when the suspension not just of funds, but of the member helpline is in force. Workplace pension savers might expect to have a rather stronger statement on this than that in the Chair’s statement.

Screenshot 2020-04-04 at 16.30.26

Earlier in the year , L&G had some kind of an admin meltdown. It has led to the IGC marking L&G’s member support falling to 3  on its value for money assessment. That 3 became 3.5 when the admin recovered late in 2019. It is clear however that L&G is suffering sustained problems delivering an acceptable service to customers.

There is nothing in the report about the closure of the LGAS HQ at Kingswood or of recent industrial action. Previous reports have touched on these problems and it seems reasonable for the IGC to be questioning whether the workplace pension book is being properly resourced.

Those who are saving in Legal & General’s workplace pensions have every right to think that though they have low charges and good funds, they are getting a second rate service which is struggling to provide the most basic support at this time.

The report is well -written and nicely produced (perhaps too many stock images). However it really doesn’t sound an effective report and though it’s good that L&G have (at last) abolished the charges levied for us to get our money back, it only gets an amber for its tone, and an amber  for its effectiveness.

Value for money assessment – successful on its terms

The report gives L&G a strong  endorsement. L&G are offering “good to very good” value for money.

The measures for determining value for money are sensible and the weightings make sense in terms of the industry consensus. The IGC is operating a very balanced scorecard.

Screenshot 2020-04-04 at 17.31.19

Properly, the report marks L&G down for poor member service. Surprisingly the report gives high marks for ‘member engagement” – presumably on some improvements to the member portal.

But all the evidence gathered over the years by IGCs shows that the only metrics that really matter to most savers is the amount of money in the pension pot, relative to the money that went into it.

I hope that the IGC look beyond their balanced scorecard approach in 2020 and start looking at what members have actually been getting from their plans , relative to what members get for the same money elsewhere.

For instance, the current approach of looking at investment returns is compromised by it looking only at the performance of funds. This is how we are introduced to the performance table of the various default funds that employers can choose from

The table above shows the performance of the current default funds, as at 30 September 2019. The fund performance is calculated after all fund charges. Other product charges – like the annual management charges – aren’t included

As seriously, especially for those drawing down on their fund, the performance tables don’t give any indication of the volatility of returns within the funds. So the sequential risk experienced by savers and spenders isn’t included in the report.

Experienced performance is what people want to know about – they want to know how their pots did, rather than the abstract top-down approach adopted.

Although the VFM assessment ticks all the boxes for the industry, it really doesn’t mean much to the saver. I give it an amber; it scores for its completeness on its terms, but it doesn’t score for the people who are supposed to be relying on this report – the savers.

The IGC on ESG

I asked the IGC chairs to send me their reports when they were published and Dermot, helpfully included a lot of information on the L&G ESG Hub (hub is the most overused word in financial services right now). The hub can be accessed via this link

I do think LGIM are very responsible investors, but I’ve been frustrated over the years that employers cannot access an overtly responsible default without taking advice.

Finally , L&G have adopted a green default in FutureWorld MAF , though its standout green fund – FutureWorld can only be used by employers as a default – with investment advice.

Even FutureWorld MAF is not the default default – it requires an employer to stick its neck out and take the risk of being the agent of change. I still think that L&G are not having the courage of their convictions, though I accept that other defaults – such as the pathway funds are being upgraded to reflect LGIM’s responsible ethos.

But so much more could be done than offering green funds. Software exists that allows savers to see inside the funds they invest in and even to vote on key issues relating to environmental, social and governance issues. If L&G have the courage of its convictions , it should be doing more to engage savers than simply offering an information hub.

The IGC should be concerning itself in how it can connect savers to the management of their funds.

The IGC on investment pathways

I have written on this blog about the importance of IGCs in overseeing the choices people need to take at retirement. The FCA has instructed the IGCs to oversee the implementation of investment pathways that people can follow if they don’t get advice on what to do with their money.

The idea was that the IGC would oversee these pathways – “the choice architecture”. Like most things else, the requirement has been superseded by the pandemic but the report has properly reported on its duties.

As with so much else at L&G, work needs to be accelerated to bring  these choices to life, they should be communicated, like ESG, through a modern-day engagement tool.

The IGC really need to get L&G putting solutions in the palms of its savers hands. The delivery of member engagement cannot be marked a five, when – years after first being mooted – an app is still under development.


The IGC -which includes Joanne Segars and Daniel Godfrey , seems to be tootling along at L&G’s place. Now it has to deal with the pandemic and its impact on members. So far, so underwhelming.

IGCs are there to protect members and members need a lot of protection right now.

For all the resource accorded the IGC, this is a me-too report. This IGC needs to raise its game – so does L&G.




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People’s Pension gets serious on small pots

Screenshot 2020-04-03 at 06.32.13

The changes announced yesterday by People’s Pension and its parent B&CE are significant.

  1. It’s furloughing its sales team, battening down the hatches to new business
  2. It’s changing its charging structure, protecting itself against the ruinous impact of small deferred pots.

While the furloughing is most significant for the 140 staff who are effectively on gardening leave, it is partly subsidised by the tax-payer and is reversible. It should not impact on service levels to current customers and shows an insurer being ahead of the game – I don’t read this as panic.

Patrick Heath-Lay used his words careful when announcing changes to the charging structure (in the longer term much more significant).

“As we evolve our charging approach to meet changing requirements, we think this approach combines fairness, incentives to save, and prudence”.

I remember John Jory telling me of the 0.5% mono-charge that People’s Pension would employ to simplify pension charging. At the time (2011) – it was expected that the pension cap on defaults would be set at 0.5% and Legal and General were actively lobbying for a cap this low (I tried to stop this madness by literally kicking Adrian Boulding’s butt ).

By introducing the £2.50 per annum member charge, B&CE will enhance revenues from People’s Pension by £10m but they will have abandoned John Jory’s dream. People’s Pension  will join NEST, NOW and some parts of Smart in adopting a complex charge, albeit a much lower fixed charge than their competitors.

This may be “evolution” to Patrick , but there will be many within B&CE and further, that will see it as a retreat from the proud announcements made nearly ten years ago.

A necessary retreat?

By introducing this small but significant charge, People’s Pension has given itself a safety valve. The master trust said its new approach would reduce the cross subsidy by active members of millions of small, inactive pots, which are increasingly created by auto-enrolment”.

As well as implementing the annual fixed charge, it has halved the starting rate for a rebate to a £3,000 pot, at which point members are eligible for a 0.1% rebate. This grows to 0.3% on savings over £50,000.

It expects around half a million members to benefit when this is implemented later this year, with an illustrative member on an annual salary of £20,000 and a pot of £3,000 paying the equivalent of 0.3% total annual management charges over 20 years.

The charging structure at People’s Pension has evolved from the simplest to the most complex in the space of a few months.  Is this necessary?

Is this a challenge to Government to get pots moving?

When I first read the report of this change, I assumed the £2.50 charge monthly (years of selling such charges had inured me). That the charge is annual (21p per month) surprised me and apologies to those who read my erroneous tweet

I don’t expect it to stay so low and for this reason.

Two of the four big auto-enrolment master trusts have now put in place protection against small pots (the other is NOW). Smart has some protection.

If the Government cannot get small pots to follow members when members leave employment, then pot proliferation will increase. The DWP estimate that there could be 50m abandoned pots by 2050.

With the average deferred pots size valued in hundreds rather than thousands of pounds, even a £2.50 pa charge is going to significantly reduce the value of several million small deferred pots , languishing with Peoples Pension and NOW.

Moving these pots on will increasingly become a commercial imperative not just for providers , but for Government and most of all the members. But there is no mechanism in place to do this.

Technology is not in place to allow the pots to tag along behind someone moving jobs and the cost of organising the transfer by a regulated financial adviser cannot be recovered by fees (in many cases the fees would wipe the pot).

This change of charging is a direct challenge to Government to get pots moving. If Government doesn’t listen, People’s Pension can further increase the fixed costs, effectively creating an active member discount to counter current cross subsidies.

Significant changes

Unlike  insurers, People’s Pension is a trust and has little recourse to capital other than from its parent – B&CE – itself a mutual.  People’s can rightly claim that it has been given little choice but to protect itself, its parent and its members from the calamity of pot proliferation.

It should be remembered that Patrick Heath-Lay, as CEO, has a responsibility to all parties to keep People’s Pension solvent and prosperous. These are necessary changes – albeit they make the People’s Pension a complicated beast.

Patrick Heath-Lay was one of the first advocates of a pension dashboard and has been at the forefront of the argument for a technology solution to the problems of pot proliferation.

Patrick Heath-Lay  has now thrown down the gauntlet. If they are sensible, policymakers within both DWP and the Treasury will take notice.

The sooner the pensions dashboard allows people to see their pots in one place the better.

The sooner that significant changes to the rules governing the aggregation of small pots are put in place the better.

The sooner that “pentechs” are allowed into this argument with their aggregation solutions the better.

Screenshot 2020-04-01 at 17.38.45

Finally – some more on the charges evolution

The announcement made to Professional Pensions, is fully inclusive of all changes. But some of the recent changes to the People’s Pension charging structure are so new that they need to be clarified.

Clarification to the new tweak in the People’s Pension charging structure was solicited by Darren Philp of Smart Pensions (formerly head of policy at People’s Pension) and disclosed by the current head of policy at People’s pension (small world)

This compares to the current rebate structure

For the part of their savings:

  • up to £6,000, no rebate is given
  • over £6,000 and up to £10,000, we give back 0.1%1
  • over £10,000 and up to £25,000, we give back 0.2%
  • over £25,000 and up to £50,000, we give back 0.25%
  • over £50,000, we give back 0.3%.

All that is changing is the substitution of the £6,000 trigger point with the lower £3,000 point.

Complex stuff.


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Aussie actuary flies DC…


I needed to travel to London. I began my preparations with a call to an airline that I hadn’t used before but that I was keen to try, given its appeal­ing advertising.

“Wombat Airways, good morning, this is Margaret and how can I help?”

“Good morning, Margaret, I’d like to book a ticket for a flight from Mel­bourne to London at the end of next month. My name is David.”

“Well, David, I can help, but before we talk about where you want to land, can I ask how much you want to pay?”

“Well, whatever it takes, I suppose. What’s your price?”

“I’m sorry, I can’t tell you that since that would be giving you advice. No, you must tell me how much you want to pay.”

“But you must give me some idea? What if I said $5000; is that enough?”

“It might be, David, but we won’t know in advance.”

“Well what are other people paying? What would you pay if you were me?”

“Look, I can’t tell you. It’s a risk and you have to make that choice; I can’t make it for you.”

At this stage, I was starting to be­come just a little tense, but did my best to be civil with Margaret. After all, she was probably following a script.

“OK,” I sighed, “we’ll stick with the $5000.”

“Fantastic,” she said “let’s pretend that $5000 is enough and see what happens!”

“Margaret, what happens if $5,000 is not enough?”

“If your money runs out, we will ask you to get off. There are an increas­ing number of passengers being ejected these days, so you probably won’t be alone. If you do fail to reach your objective, you will have to rely on a pair of roller skates and a dodgy plastic com­pass to get you home.

Those items are provided by the Government, but only to those people who don’t already have a pair of roller skates and a dodgy plastic compass. They call it their ‘means test’.”

“And if $5,000 is more than enough?”

I asked, looking forward to hearing a sensible answer for a change.

“In that case, we will send you a cheque for the balance, less a payment fee.”

“Will you pay interest?”

“Yes, but we don’t know how much. It could be positive or negative.”

I didn’t feel like entering into a discussion about interest and the theoretically interesting diversion about whether interest could be negative. In fact, I just wanted my tickets booked, paid for and the phone call to end. But Margaret wasn’t finished.

“Now,” she said with renewed brightness.

“What type of aircraft would you like to fly in? At Wombat, we have a range of options for you to choose from, to allow you to tailor the flight to your personal situation.”

“Margaret, you tell me which one is appropriate, given where I’m going and how much I’m paying.”

“I’m so sorry David, but I’m not allowed to. That would be giving advice. But I can tell you that our different aircraft have different characteristics; some are slower and noisier but they are exceptionally reliable, in that they will get there, but we don’t know when they’ll get there! The really new versions are very exotic, fast and quiet but we’ve lost a few recently.

Their engines have this new device fitted called a cognitive double-quick orbiter (CDO) that can fail unexpectedly but the engineers don’t really know why. It seems some of the pilots weren’t even aware the CDOs were installed.

The really scary thing was that a pilot would report a problem with their CDO on the Los Angeles route and a plane sitting in the hangar at Tullamarine would suddenly collapse under its own weight.”

“Excuse me, does that mean I’m less likely to land in London?”

“Yes, that’s right. There is a full description of all the risks in our Plane Details Specification, or PDS for short. I will send you a copy of the PDS. If after reading it you still have questions, you really should consult a licensed aeronautical advisor. But be careful, make sure your advisor is licensed by ASIC, the Aeronautical Surreptitious Investigations Commission.”

At this point, Margaret clearly felt the conversation wasn’t going as well as it should. She was only young and may have been put off by my surly manner coming over the line.

“Margaret, when I used to fly with one of your competitors, I said where I wanted to go and the airline told me how much to pay. It was easy.”

“I’m sorry, David. We have moved away from a Destination Bound (DB) system to a Destination Concealed (DC) system.”

Bewildered, I thanked Margaret, paid my $5000 and crossed my fingers.

Wombat air 2

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How will USS value itself today?


News has come in that the University Superannuation Scheme (USS) is going to press ahead with a valuation of its assets and liabilities as at the 31st March 2020. It reasons for it in a public statement.

Screenshot 2020-04-02 at 06.00.28

I had originally thought that this was to comply with the law but Professor Dennis Leech has put me right on that.

So the decision to spend hundreds of thousands of pounds valuing assets that have no market price (because nobody’s buying or selling) is being taken “not to take short term action”.

Not only is it extremely hard to work out what the price of USS’ pension scheme assets are, it’s virtually impossible to work out the impact of COVID19 at 31st March on  future and current pensioners. A valuation at 31st March 2021 could use actual mortality figures , the idea of comparing the 2020 guess with the reality a year on makes no sense to me at all.

The public has no expectation of anything going ahead right now, no Euro 2020, no Wimbledon, no premiership for Liverpool – there may not even be university exams. So why does Britain’s largest funded pension scheme insist on continuity? I just don’t get it. Nor do Kevin and Dennis

The valuation  doesn’t make common sense.

Nor (says Leech) does its methodology

Here’s Dennis commenting on a recent blog of mine  (my italics)

It is disappointing that you report – uncritically – that there are £100 billion of liabilities (in the USS).

The central issue in the valuation dispute is how the liabilities figure is arrived at. It is an artefact with no practical meaning in terms of the payment of benefits.

The expected future benefit commitments of a DB scheme are defined by projections of inflation and mortality rates and other factors. They are therefore are not affected by interest rates on government bonds which are nevertheless used to compute the liabilities figure.

Record low interest rates mean record high liabilities. The liabilities figure is highly misleading. All it does is say that gilt rates are very low (actually negative in real terms).

This suggest option 5 (See blog): do the valuation using common sense and look to see if the investment income from the portfolio would be likely to provide the pensions benefits given that the scheme remains open in the long term. That means looking beyond the daily gyrations in asset values at the economic fundamentals.

The present conditions are unique and not like the financial crisis of 2008-9 because it is impossible to forecast today what the economy will be like in the long term. But one thing is for sure the market ain’t doing that.

So what will USS do with the valuation?

USS say they will use this meaningless information and use it to

  1. Re-assess the support available from our sponsors
  2. The outlook for future investment returns (eg the growth assumptions)
  3. The deficit contributions due from universities from 2021
  4. The outlook for Higher Education and Financial Markets

Taken together, the actuarial valuation will be used by USS to put the scheme in lockdown. Quite obviously the sponsor covenant will weaken, the growth assumptions will be revised downwards, deficit contributions revised upwards and all this will be justified on the grim outlook for higher education and financial markets

USS have just commissioned a justification for pensions austerity for the foreseeable future.

This is not the way forward. The way forward is to keep the scheme open and flex the benefits

CDC lifecycle

It may be that the long term future of USS is CDC – that thought could not be spoken pre Covid-19.

If this is the plan then the trustees should be open about it. The public statement says that USS will be “flexible where we can” but this valuation is chaining it to its own railings.

Instead of pretending that USS is bigger than the pandemic and that its BAU trumps the reality of Britain on March 31st 2020, USS should cancel its 2020 valuation and put up a sign on its gates

All bets are off


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How #Covid19 opens finance.

The pandemic is opening up finance in a way that we could not have imagined a few weeks ago. On the day of the closure of the FCA’s Open Finance call for input, Sam Seaton, CEO of MoneyHub told Professional Adviser

Open finance has the power to transform consumers financial wellbeing and is essential for informed decisions to be made by them… having readily available information is a “basic human right”.

Without the information, it is impossible for consumers to make informed short, medium and long term decisions for themselves, let alone their families.

Not long till the data’s blown

The pandemic has led to home-working and a surge in demand for data.

Screenshot 2020-04-01 at 06.23.28

Organisations holding out for wet signatures are now facing not just the Law Commission’s edicts but the practical impossibility of dealing with paper. Pension Bee’s skeleton staff come in to its office for “essential work” – scanning the post required to keep transfers moving. On the other side of London Wall, WeWork’s only staffed function is its post room, now overflowing with items signed for – never to be read.

This morning – a courier will arrive at Tapper Towers so that a deed can be witnessed and returned. The deed will be delivered – hopefully at a 6 foot distance- and returned. I anticipate a farcical flinging of clipboards accross a back-street in Blackfriars.

Meanwhile, we are learning that Zoom, Hang-outs and Teams all have “record buttons” that allow us to capture moments like the signing of deeds, and mail them to each other as MPEGs.

Band-width will drive us apart (again)

My partner and I are driven apart during the day by the lack of band width from our wi-fi. Though we are only yards from BT’s Openwork HQ, we do not have BT’s “fast” brand – but some crappy version coming to us down copper wires.

For us to work together, one of us has to be offline – most of the day both of us are on web-serviced calls. So I make my way over to WeWork (no work) and am likely to be today one of less than 10 people in a building that last month saw 3000 people a day pass through its doors.

Both and I and my partner can only do our jobs if we operate on separate wi-fis, bandwidth will drive us apart again.

Closed to data = closed to business

Last week, one large insurer , deferred a decision-making meeting from March 26th to August 6th. Presumably it was thought impossible for an organisation to progress its strategy if the decisions were not taken face to face.

The deal will most likely be done elsewhere, online and with agility. Ways will be found – within the law – to enable ordinary people to get access to the information needed.

As Sam Seaton says “having readily available information is a basic human right”.

So long as we regard information as accessible only with the help of postal services, we will be denying people that basic human right. Keeping important information  on microfiche or in physical filing cabinets is simply not acceptable. If information is personal and is needed, the GDPR says it must be accessible in a machine readable format.

Businesses that refuse to share our data will close, and the current pandemic will mean  most will not recover.

The risks of not going digital

Much is made of data security and the risks of scamming, data corruption, data theft and from many other forms of cyber-crime. The fear about these risks is that we do not fully understand them. Necessarily we amplify them out of  that fear . I am not saying there are not risks from the free transfer of data. We need secure networks, we need powerful verification and encryption and of course we need humans to behave in a responsible moral way.

But the risks of not going digital are greater. Sam Seaton’s comments are spot on. If we cannot get the information on which to take decisions, we will take bad decisions or no decisions – which could be worse than bad.

The DWP estimate that unless we take steps to stop current trends, 50m pension pots will be abandoned by 2050. The PPI tell us (via the ABI) that £20bn of money in pensions is unclaimed. People who lose their pensions – lose the right to the kind of retirement they have earned through saving during their working lifetime.

Can anyone say that “closed finance” is working for them?

Here is that video!

This video has been shared 565,000 times (As at April 1st – no fooling)

I’d be very pleased if it was viewed a few more hundred times on this link. It shows how a family in lockdown, can reach over half a million people by pressing “record” and sharing a data file on the internet.

You cannot suppress good things like the Marsh Family’s communal singing. You cannot suppress the free-flow of data to allow us to know about our financial situation.

I suspect that the next few weeks will force the issue and we will return physically to our workplaces later this year, with a radically different view on how data should be shared.

The FCA closed the open finance consultation on 17th March, about the day that Coronavirus opened the new one.


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12 reckoners to work out what you’ll get.

Screenshot 2020-03-31 at 10.47.08


New help from the Ferret

Gareth Morgan has put online and free for use, his reckoners: – these help people with benefit and grant claims – estimating what they’ll get

They are called Ferret Reckoners

These reckoners, which are amongst those normally only supplied with Ferret’s calculation advice systems, are intended to help advisers with particular assessments which may fall outside our core systems. They are designed to help advisers.

For the duration of the Coronavirus 19 emergency, Ferret are making them freely available for use by advisers.

They are not definitive advice and advisers should make sure that they check and understand the results carefully. We cannot accept any liability for the use of the reckoners… You are using them at your own risk, and by using them accept those terms.

Gareth regrets that Ferret’s Helpline, which provides support for our systems and reckoners, will only be available to subscribers. Please notify any errors or suggestions to

Ferret’s Self-employment IncomeSupport Scheme (SEISS) Reckoner This reckoner provides estimates of support for self-employed people during the covid-19 crisis
Minimum Income Floor reckoner If self-employed, there will be a minimum income floor (MIF) which the DWP use for Universal Credit, even if real earnings are lower. Estimate what this should be.
Home Equity under loans for mortgage interest
(from April 2018)
See how equity could vary in future as interest rates and home prices change
Self-employed Expenses Quickly estimate the monthly expenses for Universal Credit
Surplus Earnings for Universal Credit Estimate how earnings, which have stopped Universal Credit from payment, will reduce further claims within 6 months.
Particularly useful for weekly paid people who may see 5 paydays in one period stopping UC.
Self-employed Losses carry-forward Estimate how losses in previous Universal Credit periods are taken into account for later assessments
Emergency Tax for pensions How much initial tax is payable when taking lump sums from a pension
Pay Periods in Universal Credit The payments cycle in Universal Credit
State Pension Age Shows when State Pension Age is reached and when ‘Mixed Age Couple’ rules will apply
Combined Periods Pay & Rent Periods in UC
Better Off in Work – no UC A Better-Off Changing Work Reckoner for those not receiving UC
Better Off in Work with UC A Better-Off Changing Work Reckoner for those receiving UC

New help from HMRC

HMRC has a set up a phone helpline to support businesses and self-employed people concerned about not being able to pay their tax due to coronavirus (COVID-19).

The helpline allows any business or self-employed individual who is concerned about paying their tax due to coronavirus to get practical help and advice. Up to 2,000 experienced call handlers are available to support businesses and individuals when needed.

If you run a business or are self-employed and are concerned about paying your tax due to coronavirus, you can call HMRC’s helpline for help and advice: 0800 024 1222.

For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:

  • agreeing an instalment arrangement
  • suspending debt collection proceedings
  • cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately

The helpline number is 0800 024 1222 – and is an addition to other HMRC phone contact numbers.

Posted in age wage, pensions | Tagged , , | 1 Comment

No need to lock-down innovation

Screenshot 2020-03-30 at 06.50.24

The AgeWage start-up team


Brent Hoberman calls for help for Britain’s start-ups;  in the FT he comments with regards to tech start-ups.

Britain leads Europe on almost every measure, more than £10bn was invested in UK tech last year and the sector employs almost 3m people. Beauhurst estimates that more than 1,300 UK start-ups have raised seed rounds over the past two years and now need to raise more funding.

My start-up is trying to raise money to provide affordable advice and guidance to Britain’s retirees.  We urgently need help.

Money is out there, we have a promise from a hedge fund which may or may not materialise. There are private equity funds circling. But for our 500 investors, many of whom have invested less than £100 , the promise was more of the same.

What we need at this time is not short-term debt (on offer from hedge funds and banks). What start ups need is proper long-term equity funding.

There are four ways that I propose the Treasury could involve

  1. It could make immediate Government investment available through grants or equity finance through Innovate UK.
  2. It could relax the rules on EIS and SEIS so that start ups could go back to  the business angels for a limited time and seek further funding from angels under SEIS.
  3. I suggest that  SEIS be extended from £150,000 to £1,000,000 , time limited to the end of 2020.
  4. Contributions to a SEIS paid within the first two quarters of 2020 could be considered paid in tax year 2019-20.

The logic of this is obvious. The money would enable start-ups with viable business models to ride the storm and use the period of lockdown to develop products and services ready for a more general “return to work”.

Tech start ups need not concern themselves with social distancing, our morning meetings connect  Hydrerabad, Delhi, Hampshire and London

The money would save the staff of these organisations being furloughed , the tech start-ups being mothballed and this vibrant success story being cut-off in the bud.

Indeed, when so much needs to be done, start-ups have the entrepreneurial zeal to keep a much wider eco-system focussed on business problems. My diary is full  this week meeting senior executives and junior administrators – all of whom will find their call with me energising, entertaining and productive.

I hope that this little blog will be picked up on and shared. I have no right to claim any influence over Government policy, my firm will contribute little to HMRC this year. But those companies who I trade with are mightily important to the British economy, and if they spread the word, maybe my tiny influence can be amplified as far as Whitehall.

At a time when we are  in lockdown, it is vital that our start-ups are not shut-down.


Agewage logo


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Our start-ups aren’t getting much help

It’s tough running AgeWage right now. We are a  Pentech considering a term-sheet for future funding , our development depends on new investment and our customers are waiting on our development. At a time like this , it’s easy for large companies to kick us down the road. 

I could  furlough our staff, mothball my business and wait for the metaphorical  sun to shine. Or we could press on. Life would be a lot easier if we mothballed, but that’s not what entrepreneurs do. Thanks to Brent Hoberman for writing this; I have included the gift link from FT and hope that it will be kind – AgeWage has given the FT a good few stories over the years!


This article appeared today in the FT. I’ve included the gift link

Brent Hoberman is chairman and co-founder of Founders Factory and Firstminute Capital


Brent Hoberman



The devastating impact of the coronavirus crisis on UK tech start-ups came home to me this week in a telephone call with a brilliant female founder, who was herself sick in bed with the disease.

Based outside of London, her company, which provides cash flow management to small businesses, had previously raised more than £4m. But her board is now urging her to cut half her staff because the Covid-19 epidemic has slashed the amount of time she has before she runs out of money.

Another £500,000 would buy her enough time to get a new product into the market and get ready for a much bigger fundraising and hiring more people once the shutdown is over. There are many conversations like this taking place across the country now. Should founders slash their staff; will they cut too deep so they can’t bounce back when the recovery comes; would a modest amount of cash help them save jobs and their company?

Some companies my organisation supports are finding ways to navigate through these choppy times. A tech company that provides instant access to airline and ancillary supply with a single interface is receiving interest from some of the biggest airlines and online travel agents. A business that provides cloud-based and mobile software for social care facilities is making it possible for family members get instant updates on their loved ones’ care even if they’re self-isolating or in quarantine. It is also giving away its software to help in the national effort.

That is the good news. The bad news is these early stage businesses have seen a swift and severe contraction of investor interest. Some have had funding termsheets pulled and investment deals collapse.

These are not companies like Deliveroo, Revolut and Stripe that have already received huge infusions of venture capital money. They are the pipeline of companies that will become big in the future and must rely on angel investors and small seed funds, a group that is highly sensitive to plummeting stock markets.

Chancellor Rishi Sunak has acted fast and at astonishing scale to support UK businesses. Some of his measures will help start-ups including tax holidays and his plan to cover 80 per cent of salaries for furloughed workers up to £2,500 a month.

However his current Covid business loan interruption scheme does not apply to lossmaking businesses. This creates a gap because start-ups are deliberately lossmaking in the short-term as they invest to grow. Despite recent complaints that some big companies lacked a path to profit, this is a defined, strategically sound and successful model that works.

Britain leads Europe on almost every measure, more than £10bn was invested in UK tech last year and the sector employs almost 3m people. Beauhurst estimates that more than 1,300 UK start-ups have raised seed rounds over the past two years and now need to raise more funding.

To keep them alive, the UK should create a Runway Fund to give extra time to these early-stage businesses. It would provide convertible loan notes with discounts to start-ups of up to £500,000 to give them at least nine more months of operations. The loan would then convert into equity at the next round. A British fund of £300m could invest initially in around 600 start-ups.

Done across a broad range of companies, such a fund should provide a profitable return to investors and salvation for early-stage UK tech. This is not a handout, it is an investment that should generate returns once we get back to a new normal.

The quickest route is for the funds to come from the Treasury or the British Business Bank or for commercial UK banks to group together and set it up. It could match private with public money, to ensure that taxpayers are not stuck funding the least promising businesses.

This model already exists in venture capital across the UK and Europe. We floated this idea last week and many UK tech founders are enthusiastic and more than 50 early-stage funds, accelerators and later stage funds are keen to support us. The start-ups funded should create economic value. Capital Enterprise estimates that start-ups that survive to reach the second stage of funding known as Series B end up raising 10 times as much money, supporting many more jobs.

Launching this fund would be a shot in the arm for UK tech founders, long term employment and tax revenue. It would almost certainly be emulated across Europe. Indeed the French have already launched this type of fund. Once again the UK can lead European tech policy and remain the growth engine for European tech.

Without it, we are in very real danger of losing a generation of companies. These are the businesses that we need to help both the old and the new economy bounce back after the crisis. We are in very real danger of stalling one of the few industries where the UK is a real global leader. And yet, with relatively little, it could be saved.

Posted in age wage, pensions | Tagged , , , , , | 2 Comments

Fact not fiction on the #Covid19 “death-threat”.

We need to get smart about what we’re in for with this Covid19

Depending on how we behave, between 60 and 80% of us will get this infection in one way or another.

We should prepare to be infected without fear of the unknown. This blog is the information I’ve collated for myself and if I’m wrong on any of this stuff, please contact me on and put me right.

Here is a chart that I’ve found useful. It was sent me by an Indian friend who is in hospital – now recovering from infection with Covid-19. He has been tested and is using the test to determine how far he is towards the end of his convalescence.

Screenshot 2020-03-29 at 09.03.11

The typical pattern

This tells me that when people are infected , they need to think four weeks before they can come out of convalescence.

PCM identifies presence of  the bad guy and stands for “polymerase chain reaction” it’s a way of looking at DNA to tell if Covid19 is there

IgM is the emergency good guy and stands for Immunoglobulin M which is the biggest antibody that we produce to fight Covid 19. Not around for long, this guy hands off to IgG.

IgG is the long-term good guy and stands for Immunoglobulin G and  immunises us against Covid19 coming back.

 It takes a fair bit of time to get through this disease. The vast majority of us will be out for the best part of a month, 

Covid19 infection  has a typical pattern but for about a fifth of people’s illness is not typical.

The odd thing is that while mild symptoms are most common, some people get no symptoms at all , some people get it really bad and a very few people get a massive attack that can kill even the youngest and healthiest.

Some people who carry the virus remain asymptomatic, meaning they do not show any symptoms.

The virus multiplies in the respiratory tract and can cause a range of symptoms,

There are  mild cases, which look like the common cold, which have some respiratory symptoms, sore throat, runny nose, fever, all the way through pneumonia. And there can be varying levels of severity of pneumonia all the way through multi-organ failure and death.

However, in most cases, symptoms have remained mild.

Experts have data on about 17,000 cases and, overall, 82 percent of those are mild, 15 percent of those are severe and 3 percent of those are classified as critical.

Cykotine storms

Occasionally things go crazy, this is known as a cykotine storm, a study published on January 24 in The Lancet medical journal found a “cytokine storm” in infected patients who were severely ill. A cytokine storm is a severe immune reaction in which the body produces immune cells and proteins that can destroy other organs.

It’s these freak storms that kill young people with no medical history.

So this is what I draw from this

For 4 out of 5 of us, (including my Indian friend) and others who I know have got it, they’re on the 28 day cycle in the illustration

A few of us will get it and not know it (asymptomatic)

A few of us will get it real bad (and need a respirator) – which will be really tough and could kill the weakest of us.

A very few of us will get a Cykotine storm which will likely kill us.

There are existential threats to all of us and they’re not just from this virus. Allowing us to live our lives in the fear of the worst case , means months of misery for us all.

We need to be resilient and adopt a positive mental attitude, follow the instructions given to us and stay strong and fit.

Sources as per links

What happens if you get the Coronavirus?

World Health Organisation Myth busters

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“Advice for Middle Britain” – keeping the cost down.

I’ve recently published a blog called “Advice for Middle Britain” which argues for a more honest approach to the promotion of dependent advice. It sets out a trade-off between the purity of fee-based advice and what people can afford. Most people are getting advice dependent on advice fees being taken from a pension pot, it isn’t perfect, but for 90% + of us , who would prefer advice at a price we can afford, it will do.

As my friend John Mather tells me, there is nothing wrong with saving advisory fees by charging the advice to the savings product.

Pay from the pot

More on price/quality trade-offs

In this blog I want to focus on further trade-offs price/quality trade-offs. Three in particular

  1. Face to face or remote?
  2. Standard or bespoke?
  3. DIY or managed execution?

Face to face or remote?


I suspect that Britain’s lockdown will radically change our attitude to remote meetings. Most of us have done meetings on Zoom, Skype, Teams or Hang-outs. By the time we’ve come out of lockdown we’ll be quite good at them. There are online tutorials which even I can understand.

Most of the cost of face to face is logistical. The cost of getting to meetings, of meeting rooms, of staff to settle you in , teas and coffees and of writing up the meeting and filing – all make face to face meetings very expensive.

The alternative is for both sides to meet online and agree that the meeting be recorded. Simply attaching an MPEG file of the meeting to the client’s case history is a matter of a minutes time.

We should be plain – whether as advisers or customers, we only have a face to face meeting where absolutely necessary and the cost of that meeting must be laid out and compared with the cost of the remote alternative. I am done with pretending that face to face is cost-free and this goes for that initial meeting too.

bespoke suit.jpegBespoke or off the peg?

The financial services industry likes terms like “triage”, “bucketing”: and “segmentation”, but its customers don’t. We don’t like “default solutions” either. Its not just because all the words are ugly and have negative connotations, it’s because it’s not explained to us why standard solutions offer better value for money for most people.

Most people don’t want to pay the extra £2000 per suit to get it made to measure. They won’t pay the £160 for a tailored shirt or the £600 for a fitted pair of shoes. Instead they will pay a tenth of the price for an off the peg product which is 90% as good.

We need to be clear to our customers that designing bespoke investment solutions with all the modelling that goes with them is simply beyond our means. Setting out the standard costs of the various services on a rate sheet is not just more transparent, it’s excellent marketing. It makes the business of paying for advice a standard experience too.

Self-service or managed execution?

self serve

Making a buying decision is one stage of the process and any rate card of services should itemise what goes into getting to a buying decision and why it costs what it does.

But implementing that decision, including setting up the payment system that ensures that the product/solution is maintained over time through regular reviews, needs to be explicitly stated.

If a client insists on a solution which cannot be funded from the pot, the cost of that insistence needs to be laid out. It means that all current and future fees need to be invoiced and paid for (with VAT) from a bank account.

Crystallising all costs in this way may be acceptable to some clients, but presenting the bill for advice in both ways, not only puts the customer in control, it generates trust.

Similarly, giving the customer a choice between a managed implementation and a self-service approach and laying out the costs and benefits of both puts the client in control and generates trust.

Keeping the cost down

Most advice can be delivered remotely, with standard solutions that can be self-executed. This is how advice can be delivered within a  budget without cross-subsidies. No mates rates  and certainly no hidden or deferred fees.

The cost must be the proper price for the job and build in all the costs the adviser incurs including insurance, regulatory fees, staff and premises and of course the systems and staff used to deliver clear recommendations and if necessary execute transactions.

Maybe the least understood cost, is the cost of dispute. Getting things out in the open through clear terms and conditions and published rate-sheets at each step of the advisory process, may seem unnecessarily commercial.

But here I think a clear distinction must be made between “advice” and “counselling”. Many financial advisers to offer counselling as part of their service and enjoy providing  support to customers which allows customers to consider themselves “clients” or even “friends”. This is absolutely fine, where both sides are comfortable with  this level of service. It is why people are prepared to pay huge amounts for an SJP adviser and why SJP advisers rate highly on trust-pilot.

But counselling cannot be part of the Middle Britain Advice Package. Professional advisors must be clear about what is on the clock and interact with customers in a consistent way.  When I see or phone my GP, I no longer expect a chat.

Necessarily , advice has to be commoditised, packaged and delivered to price and time. Full disclosure of costs at each stage of the process is imperative in creating and maintaining trust. Using product dependent charging is essential to make advice effecient and setting the standard delivery options as

  1. Remote
  2. Standard solution
  3. Self-service execution

…. means that advice can be affordable for most people when they need it most.

I would also argue that doing things in this explicit way, by explaining things in terms of trade-offs and by maximising efficiency, we can create a much more compelling product than the amateur shambles of the past.

Screenshot 2020-03-29 at 07.01.45

Blue sky thinking needed

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Advice for Middle Britain

agewage advice


AgeWage suggests that for the 94% of Brits who don’t pay for financial advice, there needs to be a radically better deal. 


This is how advice works today

Since the Government abolished commission in 2013, advisers have had to charge their clients fees and most clients don’t like paying the fees they’re charged.

There are three reasons for this

  1. The cost of regulated financial advice is seen as too high
  2. People aren’t used to paying directly for financial advice
  3. People are distrustful of financial advisers

For the 6% who pay for financial advice there is a highly skilled group of some 24,000 high-integrity professional advisers. Many of these advisers charge fees independently of financial products as a fixed fee or at an hourly rate. Such fees are subject to VAT and really do pay for independent financial advice.

But most financial advice is paid for on a dependent  basis, where payment is not invoiced but taken from the investment policies advised on. This cannot be called “independent” for the obvious reason!

Product dependent advice has three big advantages to ordinary people.

Firstly it exploits a VAT loophole which means it can be charged VAT free and as most people can’t claim back VAT – that makes such advice available at a 20% discount

Secondly, it can be paid for from tax-advantaged products, meaning that the advice is effectively getting tax-relief.

Thirdly, the money comes out of a pot and only appears as a deduction from the investment account. No money comes from the bank account, no cheques are signed and the transaction is – from the client’s point of view – frictionless.

Unsurprisingly, most advisers prefer to use this kind of “product dependent”  charging – rather than invoicing. Provided that the organisation operating the fund platform (the platform manager) operates a system which allows the adviser to get paid this way, the adviser does not have a bad-debtors issue.

There are of course a few snags. Many pension providers don’t mange platforms which “facilitate” adviser charging so these providers don’t get used much. NEST, People’s Pension, Now and Smart Pension don’t offer adviser charging (as examples). Consequently, though these providers offer low fees and value for the money, they don’t tend to get inflows from those taking financial advice.

Although the FCA thought that abolishing commission would do away with product bias, it hasn’t really. Most people still find themselves steered towards products that pay advisers through adviser charging rather than products (like NEST) that don’t.

Advice for Middle Britain is product dependent and it’s going to stay that way until providers like NEST adopt adviser charging or the Treasury (through the FCA and HMRC) take away the advantages to advisers and clients – of product dependent advice.

I’ve been writing about this for some time. My position is changing, I now see the need for people to take advice as more important than the purity of invoiced charging. I no longer worry about dependent charging, which I see as distinct from the conflicts created by “contingent charging” – something specific to DB transfers

AgeWage says “pay from the pot”.

Pay from the pot.jpeg

Given the choice of paying for advice from your pension pot or paying for the advice +20% VAT out of your bank account, we’d expect 94% of you to pay from the pot.

So when it comes for paying for financial advice, we want you to know what you’re doing. You are paying a lot less but you are going to get a second best service. It’s like buying a car- sometimes it’s best to buy not the top of the range – but the car that’s a little less good but a lot cheaper.

We advise middle Britain to do as much as it can itself and when it needs advice, to purchase it from the pot.

A radically better deal

We need to understand the trade off.  Understand that “dependent (contingent) advice” is not best advice but the 90% solution we can afford

If we aren’t in the 6% who pays directly, then the next challenge is to get dependent advice which is value for the money leaving your pot.

That is the subject for further articles – articles that will focus on effecient processes, the appropriate use of technology and lower margins for advisers.

We think that advice for middle Britain can be delivered at radically lower cost.

We also think that advice can be simplified rather than dumbed down. Most of the questions that people ask do not need advice, they need good information. When people need to be told what to do, they need to know what they are paying for and how much it’s going to cost. They should be given the option of a money back guarantee if what is delivered doesn’t meet expectations.

Advice has got to be a product which people can assess and value.

We’re working on a service that can deliver this – watch this space.

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The Coronavirus Job Retention Scheme

The CIPP continue to provide the best guidance on Government statements to employers in the timeliest way. This information can be found on their website and also on the Coronavirus information page on the toolbar of this blog.


The anticipated guidance in relation to the Coronavirus Job Retention Scheme (CJRS), which will see employers reimbursed for 80% of employee salaries up to a cap of £2,500 per month and associated wage costs for furloughed workers, has been published.

There is information designed to assist employees and a separate guidance page for employers.

The advice given is that should employee and employer agree, a company may place the employee ‘on furlough’ where they’re unable to operate or have no work available due to coronavirus. The employer must write to the employee to state that they have been furloughed and should keep a copy of the correspondence.

Employees can receive 80% of their wages, up to a monthly cap of £2,500 and they will continue to pay taxes in the usual manner. They will pay income tax, national insurance contributions and employee automatic enrolment contributions (on qualifying earnings), unless they have opted out of the scheme, or choose to stop contributing.

Employees must not complete any work for their employer in the period in which they are on furlough, so must not provide services or generate any revenue. If employees are still working, but on, for example, reduced hours, then their employer must continue to pay them accordingly and will not be able to claim this back through the CJRS. Employees are still able to complete volunteer work or training, but if they are, for example, completing an online training course, they must be paid at least the National Living Wage (NLW) or National Minimum Wage (NMW) for the hours that they spend doing so. The guidance confirms that as NMW / NLW is only applicable to the hour’s someone works, it does not apply to furloughed workers as they are not carrying out any work.

It is hoped that the scheme will be operative by the end of April, and the grant will start on the day a person is placed on furlough and can be backdated to 1 March 2020.

Any UK employers with a UK bank account can claim, but employees must have been on their employer’s PAYE payroll on 28 February 2020. Employees can be on any of the following types of contract:

  • Full-time employees
  • Part-time employees
  • Employees on agency contracts
  • Employees on flexible or zero-hour contracts

This scheme is not applicable to the self-employed or to any income obtained through self-employment. There is a separate scheme that will be implemented for these individuals, as announced by the Chancellor, Rishi Sunak, on 26 March 2020.

In circumstances where employees are on sick leave or self-isolating due to COVID-19, Statutory Sick Pay (SSP) is payable for that period, but they can be furloughed after this point. Individuals who are shielding in line with public health guidance should speak to their employer about whether they intend to place staff on furlough, but employers do have the option to place these people on furlough.

The expectation is that not many public sector organisations will utilise the scheme as most public sector workers will continue to provide essential services for the duration of the coronavirus outbreak. Employers in receipt of public funding for staff costs should continue to use that money to pay staff as usual, and there is no requirement to furlough them. The same applies to non-public sector employers receiving public funding for staff costs. Organisations accessing public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.

For anybody made redundant after 28 February 2020, their employer can agree to re-employ them and instead place them on furlough.

Employees can be placed on furlough by one employer but continue to work for another. Those placed on furlough by more than one employer will receive separate payments from each employer.

For individuals earning less due to being on furlough, their Universal Credit payments might change to reflect this.

For women on Maternity Leave, those eligible for Statutory Maternity Pay (SMP) or Maternity Allowance (MA), normal rules apply, and they will be entitled to 39 weeks of SMP or MA. For employers who provide more than the statutory rate of maternity pay, this falls within the wage costs that the employer can claim back through the scheme, and the same applies if individuals qualify for contractual adoption pay, paternity pay or shared parental pay. For those who are currently pregnant and due to start Maternity Leave, they should start their leave as normal. If someone’s earnings have reduced due to a period of furlough or Statutory Sick Pay (SSP) prior to the commencement of Maternity Leave, they should be aware that this may affect their SMP.

Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February 2020.

Claims can be for a minimum of three weeks and a maximum of three months, but this may be extended in dependent on how the situation relating to the outbreak of coronavirus evolves. Employers can choose to pay more than the grant but there is no requirement to do so.

Where individuals have been employed for a full year, their monthly earnings will be calculated based on the higher of either:

  • The amount earned in the same month the previous year
  • The average of the monthly earnings from the last year

For those in employment for less than a year, employers will claim the average of the monthly earnings they’ve received since they started work. This will also apply where monthly pay is variable, for example, for those on zero-hours contracts. For anybody who started work in February 2020, their employer will pro-rata their earnings from that month. Fees, commissions and bonuses should not be included.

Once the employee’s salary claim figure has been established, employers must calculate the amount of ER National Insurance (NI) contributions and minimum automatic enrolment employer pension contributions they can claim, as they will be reimbursed in addition to the 80% of the employee’s salary, or £2,500 per month. If employers decide to top up employee salaries, they cannot claim for the associated ER’s NI and automatic enrolment pension contributions through the scheme

The scheme is open to all UK employers who had created and started a PAYE payroll scheme on 28 February 2020, and they must have a UK bank account. Any UK organisation with employees can apply, including:

  • Businesses
  • Charities
  • Recruitment agencies (agency workers paid through PAYE)
  • Public authorities

If a company has been taken under the management of an administrator, that administrator will have access to the Job Retention Scheme.

In order to make a claim, employers will need:

  • Their ePAYE reference number
  • The number of employees being furloughed
  • The claim period start and end date
  • The amount claimed (per the minimum length of furloughing of three weeks)
  • Their bank account number and sort code
  • Their contact name
  • Their phone number

Claims can be backdated to 1 March 2020, where applicable. HMRC will pay the amounts via BACS to the designated employer bank account.

When the scheme ends, employers must decide whether employees can return to their duties, and if they can’t, redundancies may be considered.

Employees who have been furloughed retain the same employment rights, such as entitlement to SSP, maternity rights, other parental rights, redundancy payments and protection against unfair dismissal.

Payments received by businesses under the scheme must be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles. Businesses can deduct employment costs as usual when calculating taxable profits for those same purposes.

CIPP comment

The CIPP welcomes the guidance in relation to the Coronavirus Job Retention Scheme and thinks that the separation of the employee and employer guides will help both businesses and workers to understand how it will work.

Whilst the information provided will serve to answer many of the questions posed by our members, there are still many other points that require clarification, and the CIPP will endeavour to publish any further updates as soon as we are aware of them.


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The E , S and G of this pandemic.

be kind

This blog calls on us all to be kind to each other 

I believe that the way individuals and businesses behave to each other during the coming months will make a material difference to our day to day lives. But I think it will also define  the types of people we are and the kind of businesses we run in years to come.

We must be kinder in business too..

The most popular blog I’ve written this month has been on resilience. It is incumbent on us , whether in person or in business not to be a burden on others, in so far as that is possible. It is also a moral imperative that those of us who have inner resolve, share that resolve with others , through support.

So far more than half a million of us have volunteered to help the NHS in some way, showing that support. It is more than a statement of goodwill, it is a statement of inner resolve to be bigger than the problems we face.

Undoubtedly this pandemic will finish off many vulnerable businesses too. Despite the business rate grants , the subsidised loans and subsidised furloughing, most businesses will struggle for the rest of the year and well into 2021, not just with cashflows, but with their inner resolve. Businesses are run by people and are subject to the anxieties that beset staff.

There is a temptation to repeat the mantra “that’s business” as if a different set of moral standards apply. But we must be kinder in business too. While we must still compete, we need to support each other too. This was something that came out loud and clear from the talk that Gavin Littlejohn gave to us pentechs in WeWork only a couple of weeks ago.

Can ESG admit “force majeure” ?

It is regrettable that the first advertisement I read this morning was from a leading firm of lawyers advising me how they were helping their clients getting out of paying each other what they’d promised

Screenshot 2020-03-28 at 06.45.46

Clicking on the link , I discovered that CMS can help me use the pandemic to excuse myself and my company from meeting our promises.

Due to the unexpected and rapid outbreak of the virus, it is understandable that companies are now looking to rely on force majeure provisions in their commercial contracts to excuse delay or non-performance.

There are counter-parties to those not getting paid or not receiving what they’d paid for. Those counter-parties may not have the same legal recourse as CMS’ clients.

It is important that in business , we consider the social consequences of how we behave, it is at the heart of the E-S-G equation.

Can ESG permit the suppression of these voices?

Screenshot 2020-03-28 at 07.38.18

They campaign for us

Following the financial crisis , certain firms chose to exploit the power of their balance sheets (or in RBS’ case- the power of the Treasury’s balance sheet) to close down other companies. This predatory behaviour was at the cost of ordinary people’s livelihoods and it is to the great shame of organisations that predated on the weak and vulnerable that they have yet to compensate or even admit culpability.

Gina and Alan Miller have pulled together many of the most egregious examples of poor behaviour in the financial services sector. It is important that even where regulators fail to act, this behaviour is held up to public scorn and derision. To those who are unkind – your fruits are withered, you are known by them. Alan and Gina (especially Gina) have been vilified for their behaviour , their petitions suppressed and they have been declared personae non grata by the establishment

There are other scams not covered by the True and Fair campaign but happening further down the food chain. Many have been covered on this blog. They include the sale of Storepods, the activities of Dolphin Trust and any number of pension scams, all of which revolve around ripping off vulnerable people through lies and deliberate deception.

No one has done more to expose these frauds than Angie Brooks, whose website has often features on this blog. Earlier this month, Angie found herself in the dock of public opinion when a You and Yours article claimed that she was effectively taking money from both sides – both the perpetrators and the victims.

It comes as no surprise that I have received links to the program from many people, most of whom have been on the end of Angie’s ferocious assaults through her website Pension Life. Angie too is considered persona non grata within the financial community

A third very public figure, Ros Altmann, has also been condemned by many (including Angie Brooks).. Like Gina and Angie, she has been outspoken in demanding change on many fronts, but unlike Gina and Angie, she has now a platform for her work – which she is using to great public good.

What Angie, Gina and Ros have in common, is an empathy – an emotional intelligence that has allowed them to speak for and support many. They all have enormous resilience and inner resolve and they have all been the subject of public opprobrium.  I like all three as strong voices of a feminine campaigning Zeitgeist that goes back a long way.

Their fruit are manifold. Angie is contesting and I hope winning a court battle in Spain that may finally turn the tide against the offshore scammers she has battled with these ten years. Gina (and Alan) continue to expose the worst excesses of regulatory failings in the UK , while Ros Altmann has this week reversed some pretty awful behaviour by one major British bank and has (I hope) championed several pension initiatives in parliament relating to the Pension Schemes Bill and the ongoing struggle to create a fairer tax system for pensions.

By their fruits are they known – some will not ripen, some go sour – but these three champions of good need to be listened to, not demonised

Here is the  ESG of this pandemic.

Many will see Coronavirus as an opportunity. I am one of them. I see the impact of this pandemic as a means to scrub clean much of the mould that sits on best practice and come out of this with a sanitised society operating to better standards.

The champions of sanitisation are weak , the power of force majeure is strong, We must be kind in business as we are kind in all else.


Kindness underpins the E, S and G of this pandemic.

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Royal London IGC report – a welcome shift in focus

Screenshot 2020-03-27 at 07.18.47

Royal London are (as usual), the first IGC to report. They have been kind and sent me the Chair’s Statement which saves me searching. But it’s easy to track down here

The IGC has delivered a really interesting read which I enjoyed. At 64 pages it is no baby, but it is manageable in length and is seldom boring.


It’s Peter Dorward’s first full year in charge of the Royal London IGC and this year’s report shows a marked change from the enthusiastic approach of previous reports to a more measured and analytic style.

This  recognises the separation between IGC and provider rather better, despite Royal London being a profit-sharing mutual, the report talks of its savers as “customers”.  While this approach loses some of the warmth of Phil Green’s reports, the report reads at greater arms length.

The report also recognises the realities of workplace pensions. Whereas previous reports have focussed on the needs of IFAs, this talks to  the needs and responsibilities of employers. Royal London is now focussing on the views of members and the report is no longer focussing on intermediaries.

This is a recognition that few IFAs have the resources to provide services at member level to the workplace pensions they may have helped set up and few employers are retaining IFAs for this purpose. The majority of Royal London’s “customers” are non-advised and the independent surveys of customer satisfaction levels show that while Royal London are providing a higher level of customer satisfaction than its peer group, its customers are not particularly satisfied by what they are getting.

In its tone I think this report is an improvement, it is extremely well written and while it is dry, it is hard nosed. I give it a green for tone

Value for money

Here is what that independent poll is saying

Screenshot 2020-03-27 at 05.44.55

Let’s focus on the value for money poll

Screenshot 2020-03-27 at 05.53.58

A staggering 73% of Royal London customers don’t think they are getting value for their money.

The report’s value for money analysis does not pick up on this. The conclusions to the VFM section (which is in itself very well reasoned) state that

“Overall we consider that Royal London continues to offer workplace customers value for money”

The report opens with a section entitled “listening to our customers” and concludes that 73% of its customers are wrong. There is a disconnect here.

I would have preferred the VFM section of the report trying to understand why 73% voted as they did.

With regards to the value for money assessment, I give Royal London an amber. It works on its own terms, but not on its customers terms and IGC reports are for customers.


The bulk of the report focusses on the three key elements of value for money, performance, costs and the user experience.


User experience

The report is very good on the user experience , focussing on important metrics such as the employer’s interface – critical to the delivery of clean data and the avoidance of “out of market” risk. Royal London has a pension “plan holder ” as an IGC member and it shows.

He has been burdened with the role of championing the Vulnerable Customer and I suspect Miles Edwards (the plan holder) is making a positive difference.


Unfortunately, the saver’s perspective is lost in the analysis of performance and cost. There really is nothing for the saver to hang on to that speaks to his or her experience, only a series of charts showing abstract concepts such as fund performance.

There is some comparative performance analysis (using the Corporate Adviser league table) but again this is based on performance data not on “experienced performance”.

By that I mean what savers actually got as a return (net of all costs) and how this compared to other actual savers.

Screenshot 2020-03-27 at 06.33.50

Instead, there is some analysis of how savers have fared relative to the expectation set by the projected returns on the illustrations they received when they started their plans.

Again I think of the 73% who don’t recognise they are getting value for money and ask myself whether this kind of analysis has much relevance to their concerns.


Similarly with cost, the report is good at showing where additional costs are being created and mitigated at the fund level. There is also great precision in the analysis of the risk controls in place to reduce the cost of the complex transitions within the default lifestyle transitions.

Screenshot 2020-03-27 at 06.42.35

I could not find any analysis on the overall impact of this complicated “lifestyle journey” and whether value was being retained from all the transitions.

Again some analysis of savers internal rates of return against a charge free benchmark could have illustrated in pound shilling and pence terms what had been gained and lost.

The precision of work elsewhere suggests that Royal London are on top of their funds. The vast majority of the money is managed in-house and I see an opportunity to improve on the reporting by bringing some fuller worked examples into play (without losing the granularity on display this year.

Responsible investment

I was very impressed by the chair statement’s section on responsible investing (the right phrase).

Clearly Royal London have invested heavily in this area and they have won the hearts and minds of intermediaries

Screenshot 2020-03-27 at 06.52.02

But I think the 41% who “lacked all conviction” may best be as honest as those with “passionate intensity”. It is extremely hard to work out which asset managers are really effective stewards and I suspect that Royal London’s head start is because they are being very proactive in communicating the message. This may be  churlish, there is plenty of evidence that they have engaged with the UN charter but the statement is not  being   “wide-eyed” – it recognises that Royal London as the platform for its own and others funds has responsibility for responsible investing.

Interestingly it shows that savers see employers as holding them accountable (and professional intermediaries aren’t mentioned)

Screenshot 2020-03-27 at 05.23.48

The statement acknowledges that there is more to do and it picks  up on the FCA’s call to get member’s involved with stewardship. If 13% of those polled feel they have responsibility for stewardship, perhaps the IGC could think of ways of helping savers who think of their investment access to the kind of voting aggregation software discussed here.  I would be surprised if offering “easy access to self-select ESG funds” will do the trick.

For next year

I hope that we can get more reports like this, Peter Dorward has done a good job. But I think there is more he could do to bridge the gap between the very user-centric parts of the report and those parts which will fly above the heads of all but the experts. Adopting an approach to reporting based on what has actually happened would help here.

I note that change is afoot in the composition of the IGC to meet the challenges of enhanced monitoring of  and reporting on responsible investing. I look forward to a big push on this (as the FCA requires).

The IGC is also going to have to oversee the investment pathways (not just on the workplace pensions but on the unadvised  Royal London SIPPs and legacy pensions.).

I suspect that an increasing part of Royal London’s pension book is not advised and this may include a few policies funded by the transfers of DB pensions (advised then – orphaned now).

Royal London may need to continue the shift in focus from supporting the IFA to supporting the saver – even where products were taken out with advisers. For this is where some of the greatest vulnerability is.

From reading through this report, I think the IGC are well placed to fulfil these important duties.


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Has over half of the UK already been exposed to COVID-19?



Stuart McDonald  is my hero. He is able to speak about complicated things in a simple way and his analysis of trends in the development of the pandemic has been consistently proved right.

Here is his latest observation

But lest we get carried away, Stuart is keen to scotch rumours that we are mass-immunised. The recent media suggestion that over half of the UK may have been exposed to the virus which causes COVID-19 is firmly dismissed in this excellent article, published with Stuart and his group’s kind permission

this second bulletin from the newly formed COVID-19 Actuaries Response Group, we discuss the recent media suggestion that over half of the UK may have been exposed to the virus which causes COVID-19.

Screenshot 2020-03-27 at 07.46.03

Screenshot 2020-03-27 at 07.43.51


The Oxford study describes a simple but widely used Susceptible-Infected-Recovered (SIR) epidemiological model framework. A forthcoming bulletin will describe this model in more detail, so we will not summarise it here. We have no particular concerns about the choice of model structure.


Combinations of model parameters have been chosen which closely reproduce the pattern of deaths during the first fifteen days when death counts were above zero in Italy and the UK. For Italy this was a total of 197 deaths between 21 February and 6 March; for the UK this was a total of 144 deaths between 5 March and 19 March.

These are small numbers of deaths to use to calibrate a model, particularly one which seeks to project backwards from the first death to estimate the date that transmission began. We note the study authors’ stated intent to avoid any potential effects of local control strategies, but we are of the view that a longer time series could have been used given the lag between the introduction of control measures and observed deceleration in the rate of increase of confirmed cases or deaths.

Parameter Choices

Most of the parameter choices, such as the assumption that the transmission rate (R0) is in the range 2.25 to 2.75, seem to be reasonable and supported by the literature.

The authors take a two-step approach to modelling mortality:

  • Proportion of the population vulnerable to severe disease (ρ)
  • Probability of dying having contracted severe disease (θ)

The assumption used for θ looks reasonable and well supported by earlier studies. However, this is not the case for ρ. Values of ρ between 10% and 0.1% are considered, with no justification being provided. This is a crucial assumption since the modelling approach leads to an inverse relationship between this parameter and the proportion of the wider population assumed to have had the disease.

The first sentence in the results section is absolutely key: “Our overall approach rests on the assumption that only a very small proportion of the population is at risk of hospitalisable illness. This proportion is itself only a fraction of the risk groups already well described in the literature​, including the elderly and those carrying critical comorbidities (e.g. asthma).”

So, the whole study is conditional on the validity of this assumption. But, as implied above, some of the values of ρ considered seem implausibly low. Analysis carried out in 2015 showed high levels of disease in England’s over-65 population – for example, almost half had hypertension, nearly one in five had heart disease and a similar number had a chronic respiratory disorder. Whilst it is likely that not all of these individuals would be classified as being vulnerable, given these statistics it is unclear why the authors would consider that the vulnerable proportion might be as low as 1%, let alone 0.1%.

Screenshot 2020-03-27 at 07.40.37

When ρ is assumed to be 10% (dark red line below) the susceptible proportion looks to be around 95%, i.e. the model indicates that just 5% of the population have been exposed to the virus.

When ρ is assumed to be 1% (orange lines) the susceptible proportion is as low as 60%, i.e. the model indicates that up to 40% of the population have been exposed.

When ρ is assumed to be 0.1% (yellow line) the susceptible proportion is just 32%, i.e. the model indicates that up to 68% of the population have been exposed.

The results are even more extreme for Italy, with the ρ = 0.1% scenario implying that 80% of the country had already been infected by 6 March. We struggle to comprehend how the authors concluded that this was a plausible scenario to include in the paper in light of the 7,000 additional deaths which have tragically occurred in Italy since that date, and the significant differences in confirmed cases and deaths between the Lombardy region and the rest of the country.

Media Reporting

The study authors make no explicit claim that the scenarios with a very low vulnerable population, and therefore a very high wider population exposed, are the most likely scenarios. They do however say that “Importantly, the results we present here suggest the ongoing epidemics in the UK and Italy started at least a month before the first reported death and have already led to the accumulation of significant levels of herd immunity in both countries.”

Crucially, and somewhat predictably, reporting has focussed on these high exposure scenarios. For example, the headline in the Financial Times was “Coronavirus may have infected half of the population – Oxford study”.

We feel that this message is potentially misleading and could undermine key public health messages about social distancing. Whilst it is important to communicate and discuss the uncertainty in how the virus has spread (and possible ways of understanding it better), given the seriousness of this situation, both academics and journalists need to take great care to communicate their messages in a clear and balanced way.


Fundamental principles of epidemic spread highlight the immediate need for large-scale serological surveys to assess the stage of the SARS-CoV-2 epidemic, Lourenço​ et al, 24 March 2020

By Stuart McDonald FIA CERA for

COVID-19 Actuaries Response Group – Learn. Share. Educate. Influence.

Stuart mc

Posted in pensions | 4 Comments

How savers can change the world


Direct involvement with the way your savings are invested

I spent time (on Zoom)  with a young entrepreneur  whose business it is to get people to change the behaviours of companies they invest in.

I won’t go into detail about her company as it is aiming to sit within the service provided by workplace pensions and won’t be a consumer brand in itself.

But – as I understand it – this brilliant lady and those who work with her, intend that whether we have £50 or 500,000 in workplace pensions, we’ll be able to know what’s happened to our money and express our views on how their behaving.

This is a radically different approach to ESG than setting out to buy a fund that only invests in companies and assets with high environmental , social and governance ratings.

It says that wherever you are saving you can make a small but significant difference to the decisions taken with your money.

How do such things work?

The idea is simple .  A platform manager offering diverse workplace funds can show savers that their money is invested with companies they may or may not have heard of. Savers can chose to learn about the companies or simply look at the key voting issues that shareholders have and get involved. The kind of things people can vote on include director’s pay, the measures companies are taking to reduce emissions or their involvement in social issues effecting our or other’s wellbeing.

Each savers vote is aggregated and fed back through the platform to the fund manages who have the actual voting rights. This collective vote feeds through into the vote of the fund manager on behalf of all investors in the fund.

From small beginnings , such an approach could allow ordinary savers to gradually change the behaviour of the boards of the mighty companies that rule the world.

Why this matters to me

I passionately believe in the power of people to change the world we live in. I believe that new technology can give ordinary people a voice as powerful as Donald Trump’s. Indeed that voice can challenge the bad things that unfettered capitalism can do (like the US shale industry is getting challenged right now).

What savers have (pension savers in particular) is ownership of the means of production. There is nearly a trillion pounds in workplace pensions – most of it invested in the shares and debt of UK and overseas companies.

If only a tiny proportion of people could be mobilised to consider themselves as investors and to act like investors, then the impact on the behaviour of those who run these companies could be immense. Because people now understand trends, they can see that when ideas start trending they can quickly go viral and then those ideas become unstoppable.

Which is how change happens. It happens because of technology, because of the aggregation of data and because the results of all this voting can be presented in a powerful way in real time. Savers can change the world.

Why this matters to platforms

The great workplace savings platforms are run by NEST, Peoples, Now, L&G, Aviva, Smart, Aegon, Scottish Widows , Royal London and the consultancies.

They need to improve in two ways,

Firstly in ensuring funds on their platforms are invested responsibly.

These platforms are governed by IGCs and trustees who are charged with ensuing that the platform funds are managed responsibly. So far, this has been taken to mean on a top-down basis. Consultants are brought in to look at the funds and opine on how green they are. Provided that the fund managers can convince the consultants that they are doing their bit, the IGCs and trustees can state in their chair statements that they have done their duty.

But the FCA and the DWP are both unsure on this. There is in the pension schemes bill, an amendment which will mean trustees will have to measure what is actually going on within the fund’s investments. The FCA are currently conducting a review of IGC activity which is likely to take a dim view of what is commonly called “green-washing”.

Platforms need to do more than create work for consultants which allows fiduciaries to tick boxes.

Secondly in improving the level of voluntary savings

While “improvement one” is a matter of compliance with the requirements of policy makers and regulators, requirement two relates to the commercial viability of the platforms themselves.

These platforms run on the revenues from the funds which sit on their platforms – taken as an annual management charge. The more the funds, the more the revenues, as fixed costs are static , the more the funds – the more the profitability or viability of the platform.

Whether for profit or not for profit – a viable platform feeds back into shareholder or member value.

There is in the eye of platform managers a clear link between an engaged saver and increased contributions.

If they can find a way of getting savers to start thinking of themselves as investors, they are on the way to getting more in voluntary savings.

Why this matters to my business

AgeWage scores are about getting people engaged. When we started out nearly 18 months ago, we had it in our head to produce AgeWage ESG scores by somehow scoring the funds people invested in , using measures developed by businesses like Morningstar’s Sustainalytics.

We have moved away from this approach and now concentrate on engaging people with the value they’ve got from the money they’ve saved – a simple outcomes based measure which provides a simple benchmark – (how others have done).

But our scores do not help people engage with their savings. This does,

So I hope that the simple ideas pioneered by this young lady and her colleagues are adopted by the platform managers and accepted by the fund managers. If they are , then we will use the engagement we create to engage with their savings as investments by hooking people into the process these young people are creating.

And I will be promoting this idea to the Trustees and IGCs who I talk to so that more platforms can adopt this methodology. It will mean fund managers doing what the DWP and the FCA have been calling for – they will need to make their portfolios transparent to the people who save into them and they will have to listen to the opinions of those people as they exercise their vote.

And they will have good commercial reasons for doing so. Because if we are ever going to save enough to have a good retirement, we are going to need ways of engaging with our savings.

How savers can change the world

We are going though a crisis right now which is not about macro-economics. It is about microbes in people’s throats.  The health of ordinary people is tipping economies into recession and routing the markets. The lesson’s simple; people drive markets, maybe this crisis will allow the markets to start listening to the people again.


Posted in ESG, pensions | Tagged , , , , , | 3 Comments

Shouldn’t pensions “stay at home”?

Should we stop transfers for the next 6 months?



Ros Altmann is still close to the power brokers

Yields are down, markets are down, has there ever been such a time to transfer your pension rights?

That’s what many people may be thinking and if you were a financial economist you could construct an argument to say that transfer values have never offered such value for money.

So why is Ros Altmann, herself an economist, calling for a temporary ban on transfers.

In her own words

“it is impossible for trustees of pension schemes to be sure of the underlying value of the pension funds, or each individual’s share”

What Ros is referring to is the rationing of money offered by trustees to those taking a transfer according to the scheme’s ability to pay.

Operational problems with transfer values

What actually happens is that when the scheme actuary issues an “insufficiency report” to the trustees telling them that the scheme is underfunded, the trustees should take action and reduce  the transfer value.

For example, it the actuary says the scheme only has 85% of its liabilities covered by assets then the trustees might apply a reduction of 15% to the full transfer value. For a typical member this would reduce the amount paid out over the PPF level of compensation by around a theoretical 45%.

In normal circumstances, these theoretical calculations might have some meaning, but Ros’ point is that we are not in normal times

  1. The liabilities of a pension scheme cannot be readily valued when the valuation rate is determined by emergency measures (the slashing of interest rates)
  2. Assets cannot be properly valued.
  3. Many funds depending on physical assets are insufficiently liquid to meet large cash demands and are currently gated.
  4. Whatever the valuation of the fund one week, could be wildly different the next, the typical guarantee periods for transfer values are too long for comfort.

Add to this , the cost in terms of actuarial and administrative resource trying to administer transfer values, and you can see the kind of frustration developing between advisers, schemes and members, that characterised the end of British Steel Pension Schemes’ Time to Choose.


We are almost all in some kind of shock at the moment. That shock makes us vulnerable, makes us prone to making ill-considered decisions based on fear. Again I think of the situation that grew in Time to Choose where people wanted out at any price.

The great crime in Port Talbot and elsewhere was that some advisers played to that vulnerability rather than encouraging more rational behaviour. We know now that they were encouraged to advise against member’s interests because of the financial incentives from encouraging transfers to go ahead. While I think advisers have to be more cautious today, those incentives still exist and we shouldn’t underestimate the financial pressure some advisers will be under. Some advisers themselves could be considered vulnerable.

The case for  intervention

The operational issues are with the Trustees and as much as they impact scheme funding levels, a matter on which the Pensions Regulator could provide immediate guidance. Trustees would need to have the strongest of steers from tPR to stop providing transfers, or balls of steel.

The FCA has still to determine whether it will allow conditional charging gong forward. It has no history of intervening in market practice preferring to wave its stick in the air and leave the IFA to make up his or her own mind. Many IFAs have been as influenced by the increase in PI premiums (and retentions) as by FCA threats. Nonetheless , the FCA has closed a number of IFAs and a strongly worded statement from the FCA on the transfer situation is as much as we can expect right now.

In short, I think it is going to take HM Treasury and DWP to get involved for a ban to be put in place and I am not sure that the regulatory bandwidth – stretches this far. But Ros Altmann is a lot closer to the power-brokers than I and her call to action may be directed at the likes of John Glen , Therese Coffey and Guy Opperman.

Certainly if Government can lock the doors of our houses, it can lock the door to our pensions.

Small pot exemptions

Speaking with the Daily Telegraph on this yesterday, I was told that some advisers suggest that small pension pots (valued at less than £30,000) could be unlocked to protect livelihoods, mortgage arrears and financial ruin.

The amount of pension needed to generate a £30k transfer value is typically less than £1000 pa, so the argument is that a pension is a cheaper form of immediate finance.

But an increasing income of £80pm for the rest of someone’s life is a much more valuable benefit than can possibly be imagined by the person prepared to give it up for short term financial relief.

Unfortunately there is no-one to stop someone with a very small pot, taking the money. Because of the “small pot exemption”, members of DB schemes with CETVs less than £30,000 can just be cashed out – the transfer payments leaving a DB scheme, into a SIPP and from there straight to the creditor or worse- the scammer.

If we are to ban transfer values, then closing the loophole that gives vulnerable people the right to self-harm , should be part of that ban.

Protection of the most vulnerable

We are in the midst of a national emergency,  we await further financial measures from the Chancellor to protect the self-employed and those who are so under-employed as to rely on the various parts of universal credit – and pension credit.

These include people with high levels of currently unserviceable debt who (if they have pensions) are most tempted to liberate those pensions.

Pensions are for life and not to be used as a sinking fund for those who are in crisis. Ultimately we have a benefits system which acts as a safety net and prevents people from making themselves long-term casualties. The tax-relief they received on pension contributions was granted to protect not encourage people from becoming a burden on others.

Why I am with Ros Altmann

Any kind of Government intervention on transfers should be deliberate and justified.

I think that it’s brave of Ros Altmann to take this position (she has actually argued for people taking transfers in different circumstances).

It is a recognition of the extreme circumstances people find themselves in which make them vulnerable, those with least – most so. It is also a reflection of the dire circumstances of pension administration (referred to in the same blog). We should be focussing pension administrator’s minds on cleaning up data – not on the substantial burden of transfer value administration.

But most of all, whatever people take today – as transfer values – is unlikely to be fair value for all.

If transfer values are at an all time high (and I think that full ones probably are), then to manage those transfers through insufficiency reports will be a huge task and one that most actuaries and trustees will struggle to execute.

At the end of this argument there is one phrase ringing in my head

You’re better off at home

When it comes to pensions – stay where you are.

Posted in advice gap, age wage, FCA, Financial Conduct Authority, pensions, Pensions Regulator | Tagged , , , , , | 2 Comments

Strong Government and self-regulation

Lance armstrong

Don’t cheat

Yesterday saw the Government finally put its foot down and demand we comply with its request to stay at home. Short of putting troops on the street there is not much more that it can do- now it is over to us to show some leadership.

There are two things we can do.

Firstly, we can follow orders and not bend the rules. Whatever the rules are on furloughing, businesses must follow them – not bend them.

Secondly we need to start showing leadership ourselves. I had to be “out and about” yesterday, I had a medical appointment in the West End – made on Sunday (happily my lungs are clear). In travelling accross the Cities of London and Westminster I saw all kinds of behaviours that were breaking the rules of social distancing and when they impacted me – I called them.

This is no longer a joke – we are no longer laughing about fist pumps, or shoulder touching, that’s six feet too close for comfort. Unless it’s a member of your household.

If you can stand the reality, read this article, bravely published in the Daily Mail. When I heard my good news, I asked the doctor if I could relax, she looked at me piteously, one of her colleagues – an 18 year old in rude health had died this week. None of us are remotely out of danger.

I have over 25,000 linked in connections and some of them have the virus – at least two are in hospital with it but statistically 20,000 of my linked in connections will get the virus and hundreds will die of it. The behaviours we show from now on will determine whether those hundreds grow to a thousand. 5% mortality is within the bounds of possibility.

Our responsibilities are to ourselves first, our family next – then our colleagues and our wider social circle. Ultimately the wider society contains everyone from those who work on building sites to those who run the markets.

We cannot cheat

The various kinds of anti-social behaviour we have seen are forms of cheating, and cheating on ourselves, While we should take advantage of the breaks available to us in our business and personal lives, we cannot take advantage of others.

In my work at AgeWage , I have been helping fiduciaries, employers and providers understand their data. If my data requests are inhibiting organisations from carrying out their responsibilities to savers, I will withdraw those requests. If however – as I believe – the data can help, I will make sure that help is given.

Now is a time when good citizenship is required in and out of business and that means scrupulous behaviour to each other. We cannot cheat.

For there will be no-one to check on us

One of the consequences of lock down, which has not been properly considered, is that Regulators will not be able to regulate as they had planned. The Pensions Regulator is already withdrawing some of its services, I hear the FCA are relaxing rules on financial reporting.

Here are the comments of one retired actuary to me having looked at the current rules on actuarial valuations (forgive the language – we talk like that).

had to laugh

– went down the list of things to be investigated for an actuarial valn.

Laughed at them all

Covenant in short medium and longer term. Ha fucking ha.

Mortality experience in past 3 years and recommendations for next 50.

Investment returns since last valuation and …..

Asset values.

Prudence in future discount rates.

Then the recovery plan.

Oops – cannot be afforded.


We have to keep our promises

My take on this – we make promises but they cannot be measured just by words and numbers, ultimately they depend on integrity .

To suppose that we can rely on peacetime measures for managing our pension schemes is as lazy as to suppose we could wonder around Richmond Park in swarms.

Our capacity to manage the pension schemes on which people will still rely , when this crisis is over, depends on our applying the lessons we have individually learned over a lifetime. Those lessons are experienced and not plucked from COBS or tPR guidance.

We – those entrusted to look after other people’s money (or data) have a responsibility that goes far beyond a rules based regulatory system.

We have responsibilities to ourselves and to others which are grave and onerous. They start with the way we conduct ourselves in our daily lives and they are rooted in the moral framework of Britain’s business community – which is fundamentally sound.

Trust government

Keeping promises


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Confound #covidiots; best practice in a time of crisis.

Do everything as good as this

best practice

It’s important that over the next few weeks, we don’t let standards slip. There’s a temptation for us to “shut up shop”, because others have to shut up their shops,

But business standards have to be maintained. After a brilliant wake up to money – with Micky Clarke ensuing that the program came from home, it was back to Rachel Burden who was left without a news bulletin. The BBC’s main current affairs program was unable to broadcast its 5 O’Clock news bulletin. This wasn’t a sign of the times so much as a sign of bad planning and incompetence. We’ll make allowances, of course we will, but this was not to the standard we expect of the BBC.

I got cross over the weekend with an organisation that promised a two for one offer for mother’s day. It was only available online but the banking verification service was broken, the email back up support service unhelpfully promised normal service would be delivered within two days. If you’re shutting up shop, put the sign “closed” over the offers.

Here are two examples of bad service where the customer has a right to feel short-changed. Neither has the slightest long-term importance, but if we allow sloppy standards to creep in, then avoidable accidents will happen.

Which brings me on to #Covidiots

I went for a walk with my partner on Sunday down to Greenwich, we walked the tow path down through Rotherhithe, it was a cloudless day and there were others out jogging or biking. People were extremely courteous, rarely did we get within 6 feet of others.

Somewhere around Greenland Quay I noticed a bunch of lads with a soccer ball sitting in a circle, they were passing a joint between each other. Five lads sucking from the same roach – come on guys.

There’s low standards and then there’s crass irresponsibility. I’m glad that social media is calling #covidiots.


When going out is right


We need to be careful not to demonise those who leave their doors. Millions will go to work this morning and they include all the essential workers in the NHS on whom our lives depend.

I got a call from a guy called Said at 10.30 yesterday (Sunday) morning. He invited me to go for a chest scan at UCH. I asked when, he said I could take my pick – I’m going today. Apparently people were not taking up the appointments they were offered for fear of leaving the house.

Said told me that he was having difficulty filling the appointment slots for essential appointments because people were reluctant to go to an imaging clinic. Having confirmed I have no symptoms of COVID19, I trusted in the NHS – who will be conducting the angiogram I’ll be having, to look after me.

We have to be brave and trust, finding ways of doing the things we are asked or promised to do. I was pleased to hear that blood donations were only 15% down last year, bravo to the 85%.

Covid19 may be the number one threat but other conditions can kill us. When we see people on the streets, we shouldn’t think covidiot, they may be off to save their or our lives.  While we are home-working , many are out there making sure our broadbands work and yes – those news broadcasts arrive on time! The fresh food we buy from the supermarkets has to be picked



And in pensions too…

The day to day business of administering a pension scheme is essential. Pensioner payrolls must run, contributions must be paid, recorded and money allocated to units in a timely fashion. Lump sum benefits must be calculated and paid as soon as possible.

The day to day business of pension schemes is supporting the most vulnerable groups to the pandemic, those in senior years for whom the pension is the only source of income.

No promise for the pensioner other than the pension itself. For advisers, now is the time to ensure that those in drawdown are aware of the risk of unit encashment at this time. Laughingly referred to (in good times), as “pound cost ravishing”, the full payment of drawdown from units encashed from invested funds has serious sequential risk, especially to those in the early years of drawdown.

Reassuring clients who have seen pension pot values slashed is critical. Trustees , IGCs, GAAs and financial advisers need to be close to clients today and throughout the coming weeks.

Now is the time for us to step up to the plate and do the right thing by those whose money keeps us in jobs.

Letting standards slip at this time is not acceptable. It is least acceptable of all from those or us lucky enough to have our health and have control of other’s wealth.


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Holding the thin blue line on pensions

thin blue line.png

1. The immediate threat of fraud

The policing of pensions is a precarious business and the “thin blue line” is figurative. The police are reluctant , for good reason, to busy themselves in the complexities of criminal maladministration , prosecutions for outright fraud are few and notoriously late. Scammers do not fear police but they do fear alert administrators which is why the work of Margaret Snowden and others active in the prevention of fraud – is so important. It’s especially important today

What is important is that we adopt a zero tolerance policy on suspicious activity. I don’t mean we become vigilantes , but I do think we can tighten up our processes by following accepted codes of practice. Again Margaret Snowden leads on this.

I’m pleased to see that other initiatives, such as Pension Bee’s funding of an anti-scam game that can be distributed to all vulnerable to scams (eg every active and deferred member of a funded DB plan – every saver into a DC plan).

But most of all, we need to make the stigma of being associated with pension scamming, at a time of coronavirus as odious as deliberately spreading the disease. I hope that those found to be exploiting people’s current vulnerabilities will find they have nowhere to go to hide their shame. Perhaps that’s one of the few advantages of a pandemic.

pension scams

2. The longer term impact of maladministration

It is very possible that COVID19 will shut down large parts of our industrial capacity. To avoid this happening in areas where continuity of service is vital, the Government has established a new class of worker ‘the essential worker’.

It is important that pensions administration is considered “essential” to the proper running of our financial system. Thankfully, pension administration is increasingly automated, but much of it is still dependent on manual interventions and if a backlog of work is allowed to build up because there are no essential workers to move the workflow on, then we could see real and lasting damage to the business of DB record keeping and the proper allocation of money to DC accounts.

I am worried that much pension administration is outsourced abroad. There is currently no way to get to countries where our data is held and our records updated, the worry is that a catastrophic failure in another country might not be picked up. Disaster recovery plans are notorious for dealing with the known knowns, Covid19 may yet throw up some unknown risks.

I am not involved in pension administation, other than as a beneficiary of various plans and schemes. But I worry that the risks of poor administration fall into regulatory cracks.  many of the 40,000 schemes that the Pensions Regulator has oversite for, are run on antiquated systems that can’t even make it to Pension dashboard basecamp.

Even though the administration for these smaller schemes is UK based, the worry is that if key people (essential workers) are absent from their admin duties in numbers , that irreparable damage could be done to scheme administration.

Making lives simpler for administrators


1.Transfers and valuations in general

An actuarial friend of mine sent me a DM on twitter earlier today

My personal – but of course obvious view is that this is a world changer. Generally people don’t get it, and that is understandable.

The next two weeks will demonstrate that this is dire. I am all for big moves now rather than later.

So can I ask  you what you think of

(1) banning transfers for 6 months

(2) deferring all actuarial valuations for a year.

In practice we will not have the fit manpower to do either properly in the next year. Valuations are hugely uncertain and anyway what is a year under current circumstances?

And as last Friday easing up on DRCs makes valuations redundant – and as for loads of actuaries looking at subtle changes in mortality experience in the past 3 years – waste of money.

Idea on transfer is big prevention on scams. Allow the trustees to defer more readily.

This would make life a little easier for administrators (and a lot easier for actuaries – though they may want the work).

2. Lockdown on complaints

But the bigger problem for pension schemes is  “administrative complaints”. If work stacks up, as it surely will, then the complaints will surely follow.

If – as my actuarial friend would have it, let’s have ‘big moves now”.

Let’s make it clear to members  that complaints arising from lack of capacity (essentially delays) should not be escalated through internal dispute processes – lawyers -trustees and the pensions ombudsman.

This goes for private escalations to the press, CEOs and chairs of trustees.  And there should also be a limitation of data access inquiries.

Pension administration – as important as payroll

Payroll – which is immediately accountable if it goes wrong, needs to be accorded essential worker status. So should pensions administration.

You can mothball a lot of things but you can’t mothball the regular updating of payroll and pension administration.

I wrote earlier today, that it takes a crisis for people to realise the real value of salaries and benefits. Ricky Sunak has done that with his latest interventions.

We are still unclear what children will be able to go to school tomorrow , here is the Government’s guidance with regards financial services employees who may be deemed essential. I hope that we will prioritise our administrators and make sure they are allowed to continue to do their job.

Utilities, communication and financial services

This includes staff needed for essential financial services provision (including but not limited to workers in banks, building societies and financial market infrastructure), … information technology and data infrastructure sector and primary industry supplies to continue during the COVID-19 response, as well as key staff working in the civil nuclear, chemicals, telecommunications (including but not limited to network operations, field engineering, call centre staff, IT and data infrastructure, 999 and 111 critical services), postal services and delivery, payments providers and waste disposal sectors.

If workers think they fall within the critical categories above, they should confirm with their employer that, based on their business continuity arrangements, their specific role is necessary for the continuation of this essential public service.

If your school is closed, then please contact your local authority, who will seek to redirect you to a local school in your area that your child, or children, can attend.

thin blue line


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Will Covid19 make Britain a fairer place?


Screenshot 2020-03-22 at 06.45.46

There are signs that the pandemic has jolted Britain out of the lethargy that has persisted since the last economic crisis. In this blog, I simply reprint  the comments of Torsten Bell , CEO of the Resolution Foundation, which themselves are comments on an article appearing in the FT. The gist of the article is in the title of this blog, but its substance is in the realisation of the social injustice that is becoming apparent because of this crisis. Literally the crisis is realising  for middle class intellectuals what has been apparent for poor people for many years.

The FT is a serious newspaper , a shift in its position on economic and moral matters is in itself “newsworthy”

Political decisions are now being driven not by the impact they will have on public sentiment but by scientists warning of potential catastrophe. For the first time in my lifetime, Britain seems to be on a war footing.

This formulation “lives and livelihoods” makes sense to individuals. In the immediate few months we will face the prospect of not living, thereafter the emphasis will consider a new post Covid world. At some stage there will be a realisation that we have an 80% chance of being infected.


So although it isn’t business as usual, we need to behave (economically) as if it were. Simple things like continuing to invest in pension plans are a part of this. We have to live not just to survive the present but to ensure our future livelihoods.

It has taken this crisis for Government to realise the inadequacy of our social security as a safety net. While the Government’s underwriting of wages is temporary, the FT suggests the upgrade in benefits won’t be.


It is easy to make political points here; yes- much of this looks like the Corbyn blueprint, but I think it very unlikely that even had Labour won, there could have been a consensus in the country behind these measures. What the Government is doing is embracing collectivism, while it has the chance. For the first time this century, the phrase “one nation conservatism” has some meaning.


Posted in Conservative, coronavirus, pensions | Leave a comment

Bored? Why not save humanity?

Screenshot 2020-03-21 at 09.18.22


By circuitous serendipity I have something to excite your braincells which could help us stabilise the economy, relieve pressure on healthcare systems and relieve suffering.

The competition is a lure, the prizes are incentives. The objective is to attract competitors, evaluate and rank them.

There has to be a winner, but all entrants will have ideas of some value, i.e. the ‘innovation juice’ is an aggregate of everyone’s efforts.


It is well proven that competitions solve  problems, this competition’s already engaged judges whose calibre suggests this will be no different.



The purpose of this competition is to elicit sensible viable ideas that can help abate the pandemic, i.e. to support and not try to conflict with or replace the work of healthcare professionals, businesses, NGOs and Government.

The scope of your idea can be far and wide, anything that abates the pandemic, the judges do not envisage there being any ‘silver bullets’.

Examples will come from engineering, business practices, behavioural change, scientific discovery applicable rather soon and frankly whatever else does the job. Perhaps there are really simple abatements we haven’t thought of yet, but you will.

The competition will end on 14th April 2020, necessarily quite fast so ideas can be put to use.

 You can download an application form here.

Screenshot 2020-03-21 at 09.00.25

Executive Program Overview

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  • Access to tools and frameworks that will help them enact change within their organizations
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  • Stronger understanding of how to use their position to create positive change in the world.

Singularity University’s global network is an ideal platform for this initiative, as it’s a diverse multi-ethnic group of technologists, scientists, entrepreneurs, government, NGO, corporate and SME people.

While Singularity is known for its prowess in the arena of emerging technologies, the organisation’s mission is to educate and inspire people to help solve humanity’s hardest problems and this Convid 19 coronavirus is definitely one of those hard problems.

Screenshot 2020-03-21 at 09.18.22

Posted in coronavirus, pensions | Tagged , , | 1 Comment

Web-conferencing and conduct risk

The fun has just begun…

conference call bingo

Lingo bingo has been around 25 years, I first played it when I was going through a painful strategic review with Bain back in the 1990s. Those – other than Bain, in the meeting room (remember them?) would be distributed photo-copied bingo cards with the management consultant’s jargon – we even had passwords to disguise cries of “house”.

Today’s version is played out in “isolation” but relies on our same anarchic instinct for impact. The capacity to get things wrong with mute and video buttons delights our sense of fun. The new breed of conference facilities all have “record” facilities and it is only a matter of time when someone suffers a wardrobe malfunction while in their jim jams while being videod.

I don’t think that the GDPR people ever quite got to grips with this stuff, just what do you do with an accidentally recorded video-conference?

Playful fun on corporate hardware.

This sophisticated kit is falling into our hands at precisely a time when those hands are idle.

I was watching BBC news last night and see a plague doctor crash a #COVID19 report



The deliberate sabotage of the most serious stuff is why we have conduct risk policies and why staff love to break them.

I look forward to tales of deliberate misbehaviour where playful employees make “full disclosure” in intimate ways.

Zoom, hang-outs and Skype for business are all at Siri’s beck and call, tempting the mischievous staff members to off-site hi-jinks.

The trouble is that we really don’t understand terms like privacy and decency in this context. The conduct risk manual has yet to catch up and what looms is another 3-6 months of home-working.

The incidence of ludeness and rudeness on the web will of course become a key HR metric and I look forward to earnest conferences when pixillated videos are run for the prurient delight of HR leaders. “What the butler saw” is alive and well – and a key past-time of the IT department.

Conduct risk – which is greatly to be frowned upon – is of course key to corporate culture. Without it , there would be very little to gossip about.

While I do not condone any of this hanky-panky,  I suspect it will keep a lot of people going over the next six months. Try putting that in your conduct risk framework.

Screenshot 2020-03-21 at 07.12.53

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Pubs or jobs?

Thanks Al, that tweet has the authentic voice of some who has put his life on the line for his country. Let’s not forget the millions who died for us, before pitying our constraints.


Rishi Sunak is turning out to be a bright star in this. While Johnson looked grim about closing things down, Sunak looked determined to keep us out of the misery that would befall those who could have been left not just with no job but no home.

Step forward Britannia Hotels sacked and evicted their hotel staff, hours before Sunak’s lifeline.

Fortunately, there is an opportunity for Britannia Hotels to reinstate their staff and have 80% of their wages covered. No doubt some bean counter in the Cairngorms is working out how to charge his staff rent and get the tax-payer to pay for the accommodation too.

The best bet many low-paid people have is to rely on the decency of the British people and on journalists like Andrew Neil for exposing employers who protect profit before people.

But not a lifeline for all

It’s fair to say that those who are self-employed are now at the back of the grant queue. Some will argue that this is by their own choice. That doesn’t wash for me – I’m with Frances Coppola, we need to do something radical about the compensation we give to those who cannot pay themselves.

The package that Sunak has put together – especially for small businesses, is magnificent. So long as it can be delivered , it will allow firms such as mine to weather the storm and come out the other side , where we will be able to generate the growth to pay back the debt that we will take on over the next twelve months.

But with real time delivery of information

On the subject of delivery, I was pleased to find this email in my box this morning.

Screenshot 2020-03-21 at 06.15.14

to get to live links – press the link above this picture

This is precisely the behaviour from HMRC that we had hope for , earlier this week. We are now getting firm timelines and proper pathways toward this money. It is up to businesses such as mine to follow the rules , not over-claim and do what is best for our staff and shareholders.


This morning , I will not be going to the Golden Lane Leisure Centre for a swim, I’m signing up to home exercise so beware residents of Friar Street as seismic tremors may be experienced as I attempt star jumps and burpees.

Screenshot 2020-03-21 at 06.26.23

That link doesn’t work either – cheeky!

Reasons to be cheerful 1-2-3

So this morning I’m waking up to the prospect of (1) a viable business, (2) less alcohol and (3) a new fitness regime.

We are not ones for bragging about being British, but for once, I think we can be proud of our Government. The wake up call of the Imperial College report has been listened to. Sure we should have been manufacturing respirators earlier, sure we haven’t fixed it for the self-employed and sure there are going to be horror stories in our hospitals over the next six months.

But the steps we have taken this week will flatten the curve and I am determined to solder on – self-isolating in WeWork (nowork).


Posted in consolidation, coronavirus, pensions | Tagged , , , , | 1 Comment

Mothball or keep going?


Many small businesses are faced with a stark choice. Should they go into lockdown and effectively mothball what they have – for later reuse? Or should they move on and find a way to deliver some or all of their financial plan, one way or another.

I’m sad for businesses that depend on social interaction and can see no way to continue through the months ahead. It is horrible to see people being sent home with no work to do and no way to find a job. As has been noted by many, home-working is only an option if you have something you can do at home.

I was thinking of this video as I walked to my WeWork office yesterday morning

Set against this – the resourcefulness of people to find a way

Keeping us going

Not all of us can adapt our business models to survive. Most small businesses do not have sufficient cashflow free, to continue trading at a loss for long.

People have to find out about their entitlements in strange ways!

The small business rate relief grant

It’s good that the Government has announced a grant to keep the smallest businesses going. The same goes for the extended grants to the hospitality and leisure industry.
Screenshot 2020-03-20 at 07.20.11

I learned about this from a screenshot from a colleague’s phone, shared on an email. I use this as an example both of the resourcefulness we are employing to share our lives, and as a plea to Government to make the path to this money – easy and digital. We cannot do this by post and we can’t be queuing  up at Government offices.

Even in this dark hour – data sharing can help us learn!

While on the subject of technology,  I should point out that for those of us who are keeping going, how we go about it can be of interest to those who are planning us out of this misery.

Smartphones aren’t just good for messaging, they can be used to help Government trace the virus’ spread

So as we keep going, we can help by sharing what we do. Data helps today and tomorrow!  (Note to the Open Finance consultation).

More ways to keep things going

The Government has promised small businesses they will fund the costs of Statutory Sick P ay for employers with workforces of 250 people or fewer for up to 14 days.

Banks will also be offering loans to small and medium sized businesses under the governments Coronavirus Business Interruption Loan scheme.

You can find out more about the help available to businesses on the website.

Many businesses , including us , have both corporation tax and PAYE bills to HMRC falling due next week. IF you are struggling to pay your tax bill because of coronavirus, you can call the HMRC Coronavirus Helpline on 0800 015 559.

If your business is struggling from the impact of coronavirus, then you can call Business Debt line on 0800 197 6026.

Find out more about what help might be available for your business on the Business Debtline website.
In Northern Ireland you should visit the Advice NI Business Debt Service.

Help with business overheads

It is important that both tenants and landlords know where they stand. I work in a shared office space which we are calling “no-work”. No one is working there, not even the we-work staff, who are working from home.

That means 400 businesses who are paying for space, desks or just the right to roam the communal areas. For the Citibanks and ITMs (and the Green Finance Initiative opposite us), cashflow may not be an issue. However three to six months paying for a space you cannot occupy is disastrous.

Landlords and tenants should be working together to establish ways forward. It should be remembered that many landlords are as hard-pressed as their tenants.

agewage wework

However – putting matters in the hands of lawyers helps no-one (but the lawyers).

Planning your cashflow

Considerable amounts of my time is spent re-jigging cashflows to take into account changes in costs and revenues resulting from the outbreak. I am sure I am not alone.

I don’t blame any business for packing it in – or mothballing till such a time as things get better.

But I firmly believe that prudent planning, a review of costs, negotiating with creditors and picking up any money that is on the table, can make the difference between sinking and swimming.

Take time to do your cashflow planning and you may be pleasantly surprised.

Don’t lose momentum

But most of our businesses have momentum behind them and we should remember we have agility and resilience that many larger companies have lost (we were all young once).

When I come out fighting, I do so with both hands! I am coming out fighting now and I will be talking with our customers, suppliers and partners over the next few days with the confidence of someone who has a plan.

I wish every small business owner luck and encourage you to be brave! And sometimes the bravest thing is to admit you cannot carry on – admitting that – isn’t cowardice – it’s a different kind of bravery.

If we are to lose our businesses (and I’ve no intention of letting that happen) then we should do so with pride.

Agewage logo

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Can MaPS be our national wealth service?

There were two very good comments on my blog on MAPS’ recent webinar. My thrust was that MAPS is not behaving as it should and that it should be acting as the financial arm of our NHS – with acute care available today and support for chronic conditions going forward. 

I print both here – expanding Ian’s as it is effectively a link to his vlog/blog. Both add to my thinking.

The first comment is from Howard Gannaway who is one of Britain’s leading financial planners and someone  , though he disagrees with my blog, that I have an enormous amount of time for.

Howard Gannaway

Thanks for highlighting this, Henry, but I fear your observations are indicative of coming late to the party. MAPS is not a johnny-come-lately outfit. It is the latest incarnation of a movement that has been building since the year 2000, when David Blunkett convened the Financial Literacy Advisory Group (AdFLAG), drawing in a really wide spectrum of organisations, including educationists, third sector organisations, policy groups and the private sector. The FSA went on to be the flagbearer for this group and devised the first Financial Capability Strategy after one of the most detailed pieces of social research this country has ever seen.

Over the years since then, the number of people and organisations has grown and grown. The FSA’s role was handed on to the Money Advice Service, which in turn morphed into the current Money and Pensions Service. It is not a London-centric operation. They have officers across the UK and the organisations that they engage with are similarly widespread.

You warn against MAPS merely taking credit for what the private sector does but, in recent years, it has largely been the work of MAS/MAPS that has fired up the interest of the private sector in looking at the financial capability of its workforces. All this has been done against a backdrop of experimentation and evaluation that would put many academic organisations to shame. Private sector companies have participated in evaluation of their financial education programmes that has rated them less than stellar but they have still been brave enough to post these results online – keep coming back for more.

Is MAPS perfect? Certainly not. They have their flaws and challenges like the rest of us. Successive governments have decided that the campaign for greater financial wellbeing and capability should not be a megalithic NHS-type operation but is best pursued through the vast network of national and local organisations from all sectors that have been largely marshalled together by MAS/MAPS. Your financial NHS is never going to happen in the UK. It’s not our way and I suspect it’s not really your way.

The campaigns over the years to change the relationship of the public with their money is like the classic image of getting an oil tanker to change direction. It is a long haul and I for one am glad that the Money and Pensions Service is in it for the long haul.

The second comment is from Aries’ Ian Neale who also picks up on my wish to see MaPS as a financial NHS.

Ian’s video is excellent but if you would prefer to read the transcript – it is here.

I think our country needs a National Wealth Service. That’s right, ‘Wealth’. I’m going to tell you why! Before the Second World War, many people could not afford to go to the doctor or the dentist.

To avoid this, my own grandmother had all her teeth replaced by false teeth. The need for that kind of radical ‘preventative medicine’ was removed by the creation of the National Health Service in July 1948.

If there is a national consensus about anything these days, it’s that the NHS must be preserved. No politician will attack the principle that healthcare should be freely available on the basis of need, not ability to pay. Aneurin Bevan, the health minister in the post-War government, had a hard fight against strong opposition from the British Medical Association.

They objected to the idea that doctors would be ordered around by bureaucrats, seeing the NHS as a threat to their professional freedom. Of course, private medical practice has continued to thrive alongside the NHS. You can still choose to ‘go private’, if you have insurance or the means to pay. But we are agreed that physical and mental well-being is the province of the NHS. When it comes to financial well-being though, we’re largely on our own.

True, there is guidance available if you know where to look for it, and the advent of the internet has helped. We’ve all had the experience, though, of feeling more confused after reading about options we hadn’t even imagined before we started looking. And as we all know, guidance is about what you could do: what people really need to know is what they should do, ie they need financial advice.

That costs money, and the truth is that people aren’t willing to pay for advice: partly because they don’t trust financial advisers.

Aries Insight provides concise, accurate and readily accessible guidance on every aspect of pensions legislation.

Over 130 pension providers, administrators and consultants across the industry rely on Aries comprehensive technical support to keep up to date and remain legally compliant.


Posted in advice gap, age wage, pensions | Tagged , , , | 1 Comment




jon spain

This article is by Jon Spain

Jon Spain is one of Britain’s foremost actuarial thinkers. You don’t have to  be an actuary to enjoy this piece – indeed it might help for non-actuaries to peer behind the actuarial covers – as Jon allows you to! I’m grateful to Jon for sharing his thoughts with me – he’s referencing my blog

That USS have reported themselves to the Pensions Regulator was quite startling. As I understand it, under its own assumptions, they have “technically breached” one of their funding covenants due to plunging equity markets. Is this really such bad news?

So far, I have seen alternatives suggested, namely “higher funding”, “derisking to safe assets”, “discontinuing the scheme” and “Government intervention”. Below, I suggest alternative 5.

A crucial point is that, while market values at some future time will be relevant, current market values have no predictive power (Fama, 1965). When and how far the markets will recover is impossible to say. However, just because markets are low at present does not mean that they will remain low. The perception of a problem is being driven by the concept that “financial economics” has any relevance to long-term entities such as DB pension schemes. There is an abundant lack of evidence for that and it is being challenged elsewhere. Worryingly, “path dependence” is totally ignored; it really matters as opposed to just one year at a time.

The discounting principle has been known for over 2 millennia. Converting future cashflows to the present only consistently works out in reality if the discount rate is the inverse of the investment return. As the future is unknowable, there can be no uniquely correct discount rate. There will be one set of outcomes but nobody, not even an actuary, knows what that set will be. Using the evidence available is necessary and there must be room for valid differences of opinion. Equity risk premia are realistic and bonds may fail. While the USS approach may appear “prudent”, that can only be defined relative to a best estimate. So far as is public, no best estimate exercise has been undertaken so that any prudence present is impossible to define.

The real problem is that risk quantification is very poorly captured by scalars.  This is especially the case when liquidity problems can’t be identified in advance. The huge concentration on risk, without reward recognition, is, in my view, unbalanced. In the real world, risks are only taken because of potential rewards (see Maurice Ewing interview, “The Actuary”, October 2018), not a new idea.

Indeed, as far back as 1952, Redington wrote that avoiding losses is the same as avoiding profits. Single numbers are not appropriate results for representing many future uncertainties, especially when we don’t even say what the result means (mean? median? mode? specified percentile?). In reality, scalars are grossly inadequate for indicating uncertainty of many possible outcomes so that discounting is inappropriate. Instead, we should be looking at multi-dimensional results with confidence intervals but we cannot do that with a deterministic approach. Instead of using discount rates alone, actuaries should show the uncertainty to the sponsors and trustees, using robustly supported stochastic projections. Let’s have more simulations rather than utterly misleading scalars – and much less dissimulation.

Indeed, there is a UK actuarial professionalism problem. This arises under the TAS regime in force since July2017, to which little attention appears to have been paid. Under paragraph [3.2] of the Framework Reliability Objective definition, transparency of assumptions is required together with communication of any inherent uncertainty. Under TAS 300 (pensions), communications shall explain comparison between discount rates used (or proposed) against expected assets return according to stated strategy. How can scalar results comply with those?

A recent technical paper (“O’Brien”) was presented on 09 March 2020, a week after TPR issued its consultation on “clearer DB funding standards”. Together with the current USS furore, a cynic might think that the paper was deliberately designed to bully UK pension actuaries even further into agreeing that the TPR guidance makes sense. Three years ago, the UK actuarial profession had the opportunity to explain why the current system is unfit for purpose. That chance was wasted and we are now faced with an even worse version.

So, let me propose a fifth alternative, namely “formal long-termism”, which has two strands. First, instead of using discount rates alone, actuaries should show the uncertainty to the sponsors and trustees, using robustly supported stochastic projections. We should recognise that the financials are more significant than the demographics. Using realistic best estimates seems likely to show that the position is nothing like as dire (see Secondly, this must present a superb buying opportunity for USS, improving the long-term financial position.


Posted in actuaries, pensions | Tagged , , , , , , , , | 1 Comment

Is MaPS creating a UK Financial Wellbeing Movement?

I think the question needs to be asked as MaPS’s seminar entitled”Creating a UK Financial Wellbeing Movement” presumed that the 170 people who joined its webinar were as one with MaPS’ vision – launched on 21 January 2020 which can be read here:

The Money and Pensions Service tells us it has

“spent the last 12 months working with partners across the UK to develop a national strategy on financial wellbeing: creating a roadmap for how different individuals and organisations can work together over the next decade to help millions make the most of their money and pensions”.

They  tell us that

MaPS is  now looking at the strategy’s priority areas in detail, creating specific delivery plans, and setting milestones for our ten-year journey towards better financial wellbeing. We are forming a movement bringing together individuals and organisations who want to put financial wellbeing at the heart of their purpose.

and promises that their webinar would dive into the detail of the strategy: identifying how we will all work over the next decade to bring benefits for individuals, their communities and wider society.

Why MaPS matters to me

MaPS is taking the resource for this work from the pensions industry and ultimately from  the savers and borrowers whose behaviours it is hoping to influence.

So this strategy is the property not just of MaPS and its “arms length” owner – the DWP, but each and every one of us.

My comments are from me as a particular stakeholder in MaPS as I want to plug into its strategies, especially the problems we are facing with personal debt, our lack of planning for retirement income and for the issues we have with declining health in old age.

I am not clear from this webinar, that the structure MaPS are putting in place achieves the aims it is setting out for itself and I think it’s worth laying down my challenge now, rather than complaining in 2030 – when I’ll be 69 – when it will be too late.

MaPS make it clear that it is not London centric but will be active accross the UK

Screenshot 2020-03-18 at 10.15.04

I would like to see evidence of MaPs’ footprint beyond its Holborn Circus HQ. It looks very London centric to me.

Screenshot 2020-03-18 at 10.45.15

The delivery of the activation phase from launch to 2020 is subject to the current situation with Coronavirus. I would question how this can be delivered.


Screenshot 2020-03-18 at 10.42.18

The delivery of the mobilisation and activation of the strategy depends on the engagement of a “wide range of organisations and sectors”. What are they and how can they activate the strategy. The challenge is to evidence the engagement of third parties – especially connected third parties (eg beyond Government) .

Screenshot 2020-03-18 at 10.40.46

If these are the ten year goals of the Financial Wellbeing project then we need to understand what part of the achievement of these goals is attributable to MaPS and what to private organisations. What has to happen is that MaPS – rather than taking the credit for the private sector’s efforts, supports those efforts by incentivising them. By this I mean making MaPS resource available to those who help people save, borrow and plan for the future. My challenge to MaPs is to show how it will be providing (rather than just marshalling) the resource needed to hit these targets

Screenshot 2020-03-18 at 10.18.27

I rather doubt the current wellbeing score is “in date”, I suspect it is now lower than the future wellbeing score -which is the point – future wellbeing is harder to attain but more durable.

Screenshot 2020-03-18 at 10.19.11

this complicated model ignores the impermanence of wellbeing – resilience is not the same thing as wellbeing – it is what we are currently calling on. The depths of our resilience are being tested – resilience is not part of this model (and needs to be).

Screenshot 2020-03-18 at 10.20.22

I should point out at this point that the 170 of us who wanted to feedback had no opportunity to do so as the “hands up” sign was not responded to, the audience was muted and (on my browser at least) the capacity to use the question box illustrated , only worked if you could find a turn-on switch on the GotoWeb dashboard.

Screenshot 2020-03-18 at 10.20.58

As an example, I was unable to ask what an index could do to enable “others” to monitor their customers or beneficiaries – can MaPS explain?

Screenshot 2020-03-18 at 10.21.27

This slide shows what an outlier poor mental health is. It properly illustrates how important resilience is, I fear that the mental health issues prompted by the current pandemic and the lockdown – are going to be an immediate issue for MAPS. Jus how much resource can MAPS put towards a public imagine their future wellbeing slipping through their fingers?

Screenshot 2020-03-18 at 10.23.21

The income shocks currently being experienced by the UK population are substantial and it will be interesting to see if – once we have weathered this storm, we become  more cautious and set more money aside. My experience with the pension freedoms is that people are reluctant to entrust their money to long term products (like annuities) where they don’t have access to their cash. Is the current crisis going to increase the value of liquidity rathe than the prudence of insurance? What is the need for saving?

Screenshot 2020-03-18 at 10.24.31

Which is my point. A savings buffer is often at the expense of insurance.

Screenshot 2020-03-18 at 10.25.51

This slide begs another question. Did MaPS really need to spend a year working this out?

Screenshot 2020-03-18 at 10.27.04

The “key question” is immediately answered , 17% of us borrow to pay for essentials

Screenshot 2020-03-18 at 10.27.43

These findings are marginally more interesting but there’s nothing here that should surprise us!Screenshot 2020-03-18 at 10.27.56

This slide is of use, if we are identifying those with mental health problems as the worst borrowers, we should be very worried about plans to lend such people money to get them through the Coronavirus crisis. indeed , we should be doubly worried about putting people further into debt at such a time of stress. 

So how do we solve problems?

I am afraid that much of the solution to these problems involve financial education in schools and in the family home. My worry is that we give up on the current generation and try to find a perfectly  behaved future generation.

Screenshot 2020-03-18 at 10.37.21

Screenshot 2020-03-18 at 10.36.22

This is fine so far as it goes but does little to solve the issues of today’s workers.

Screenshot 2020-03-18 at 10.36.04

But I find phrases like “meaningful financial education” hard to get my head around.

Screenshot 2020-03-18 at 10.35.21

Similarly we know that those in later life are have financial issues, but is this where MaPS can make most difference? How can a money and pension service help those who are in physical and cognitive decline. Are they not in the same position as children, increasingly dependent on those of working age?

Screenshot 2020-03-18 at 10.34.50

Guidance makes a difference to those who are trying to turn pots into pensions, but the numbers not taking up the free guidance MAPS offers , suggests that the majority of people are neither taking advice or guidance. How can MaPS work best with the private sector to change that?

Screenshot 2020-03-18 at 10.33.44

What do working age people need to know to plan for their retirement? Someone who has saved £100,000 by January may now have £65,000. Drawdown plans are liable to massive sequential risk in the current client. What can people do in their thirties and fourties to plan for the future other than to save as much as they reasonably can?

If people could have foreseen the Coronavirus, would they have put more into pensions?

Screenshot 2020-03-18 at 10.31.35

Debt is something that millions are going to find themselves in and through no fault of their own. Redundancy looms large for many of us as businesses fail. What is MaPS doing to help?

I will stop there.

I spend a lot of time in hospitals and doctor’s surgeries. I see the NHS dealing with people who are frightened by their mental and physical frailty and I see how they manage that fear.

We need to do the same, managing the root cause of much of the mental anxiety that fills the surgeries.

At this time of crisis , we need to be deploying our resources to meet the immediate needs of our customers and MaPS should be no different

As you will gather from my comments, I find the MaPS strategy too abstract and insufficiently grounded. I would like MaPS operating like a financial NHS and not as a think-tank and co-ordinator of other’s activities.

I wouldn’t agree that MaPS is creating a UK Wellbeing Movement, at best they are revealing and encouraging what we have in place

MaPS says it is open to challenge and I lay down this challenge.

 Can MaPS earn our respect (and our money) ?

Posted in age wage, pensions | Tagged , , , , , , , , | 2 Comments

The state of USS is the state of us.

In normal times, USS reporting itself to the Pensions Regulator for being under-funded would be considered a major news story. But what Jo Cumbo reported as happening  yesterday is not headline news, it is a sideshow to what is being called #uklockdown.

This week, undergraduates at Cambridge University were told they would not be able to return to study next term. For final year students, their time at university is over. They can at least console themselves, they will not be victims of the ongoing battle between teachers and their employers over pensions and conditions.

This is a “technical breach” it does not mean that USS cannot pay its pensioners, it means that according to its own assumptions it will not be able to pay pensions in the future  without recourse for more money from employers and members.

Screenshot 2020-03-19 at 05.50.13

Markets have continued to plunge since March 17th and there is no obvious floor where they will land.

Screenshot 2020-03-19 at 05.50.48

The formal valuation at the end of this month will be bad news, USS is heavily invested in equities as it is an open pension scheme with long-term liabilities.

What alternatives are there?

Alternative one – higher funding

The outlook for UK university enrolments in the autumn of 2020 is grim. John Ralfe is right to ask his question

Neither employers or staff will be particularly impresses by a cash call in the midst of #COVAD19

Alternative two – “de-risk” to “safe” assets

Screenshot 2020-03-19 at 06.06.02

But would USS be better supported if it were invested in bonds? 

Even traditional safe havens are in crisis

There does not appear to be a safe haven other than cash. Even if a decision was taken to disinvest, the market would attempt to ambush any sale of assets – with spreads going widening like the gaping jaws of the blue whale.

Alternative three – “stop kicking the can down the road”

There is an argument that the Trustees could trigger an insolvency event and press for the scheme to go into the PPR assessment period. I’m not quite sure how this go down with the general public who see no evidence that universities are insolvent.

But if employers refuse to cough up and the covenant breach persists and actually deepens, then we are in uncharted  waters.  The Government has leaned on landlords not to kick out tenants in default, on banks not to evict those with mortgage arrears and presumably some deus-ex-machina  intervention can happen here. These are not normal times.

There will be those who will want March 31st to be the point when the trustees call time on the scheme and close future accrual but I think it more likely that – to use John Ralfe’s phrase, they’ll continue to kick the can down the road.

Alternative four – Government intervention

It looks possible that the USS covenant breach is the tip of an iceberg that – were it to melt, would swamp all around it – even the PPF. The level of support needed to prop up the ailing funded defined benefit pension system on a mark to market basis – would require a hit to UK Plc’s balance sheet which – in the context of existing interventions – could seriously reduce confidence in the UK’s capacity to pay its way.

If we are to apply the principles of financial economics to the current state of the DB market, we really are in a bad place. But in no worse a place than anyone relying on their DC pension to support them in retirement.

This chart shows why open collective pension schemes invest in real assets. It is why the vast majority of people with individual DC plans are invested heavily in equities. It shows that cans sometimes have to be kicked down the road.

CDC lifecycle

The state of USS is the state of us.

From one perspective, USS is a monster – £100bn of liabilities with considerably less in assets.

From another it is just one example of a problem that we all have right now, our funded pensions are valued “mark to market” as dust.

If we are having to sell today, we are in huge trouble, if not – we can only stick with our strategy and ride out the storm.

There is no “deus ex machina” that can solve this current economic crisis, we can only flatten the curve by not rushing for the door at once.

Here is a post from a steelworker who is looking at his portfolio. He faces the same question as Bill Galvin, the USS trustees and the universities and their teachers.

I’m in Royal London and getting obliterated what’s everyone’s thoughts, stick or twist??

USS is us

Posted in accountants, actuaries, advice gap, age wage, pensions | Tagged , , , , | 3 Comments

A radically simple solution to dashboard delivery.

Screenshot 2020-03-18 at 07.03.33

Pension Bee has produced two important papers in the past week. The first is its response to the FCA’s call for input on Open Finance

The second is yesterday’s public  call to action to bring open pensions as part of the open  finance initiative.

Pension Bee identify  twelve pension providers who stand in relation to pensions as the “CMA9” stood in relation to banks. With their co-operation 80% of hidden pension data could be opened up to those saving for their retirement.

These providers are

  • Aviva (including Friends Life, Friends Provident)
  • Scottish Widows (including Zurich workplace, Clerical Medical)
  • Legal & General
  • Standard Life
  • Royal London (including Scottish Life)
  • Aegon (including BlackRock)
  • Prudential 
  • Fidelity
  • Phoenix Life (including Abbey Life) 
  • Nest – regulated by The Pensions Regulator
  • People’s Pension  – regulated by The Pensions Regulator
  • NOW Pensions – regulated by The Pensions Regulator

(We might reduce this to 11 if we consider Standard Life as part of the Phoenix Group)

Pension Bee refer to these 12 providers as the “Directed 12” for reasons that will become apparent as you read on.

The CMA9 and the Directed12

The CMA9 are the nine largest banks in the UK, as determined by the Competition and Markets Authority (CMA) as part of the Open Banking initiative. The CMA is an independent department of the UK government, whose aim is to promote market competition and fairness and reduce any harmful monopolies.

When the Government decided to intervene to make banking more open, they used the CMA to create data standards that have led to our being able to pass money between us a lot more easily and to our benefit. Open banking is in its infancy, but has been successful because of its adoption by these large banks.

I am quite sure that Pension Bee are drawing a parallel between the CMA9 and the Pensions12.

Not “lost” but not “owned”.

Pension Bee’s  key insight is that its data tells it most pensions are not lost to their owners.The vast majority of savers know who their provider is.

In fact, Pension Bee’s customers know the name of their provider for 70% of the pensions they transfer (based on nearly 250,000 records). But knowing who provides your pension is not the same as knowing your pension.

In order to receive information on that pension, savers are usually required to sign paper forms, sending their valuable information all around the postal system. It can take several months for a saver to receive a reply to their request for basic information. Consumers cannot have “ownership”, as the government asks them to, if they cannot access basic information like balances, charges, performance and investments easily online.

The dashboard finds but won’t grant ownership

I’m quoting her from Pension Bee’s response to the FCA’s call for input on Open Finance

That pensions can become “lost” is a concept well-recognised in the pensions industry.

Lost pensions are estimated by the ABI to be a £20 billion problem. In recognition of this problem, the dashboard’s main priority in the short to medium term is to reunite owners with ‘lost’ pensions.

These pensions could be held with one of 40,000 possible schemes, with wildly differing levels of data preparedness and access to resources. The dashboard or more accurately, the ‘pensions finder service’, will likely stay focused on achieving maximum coverage, which will undoubtedly result in minimal levels of information being shared with consumers.

It will take many years to achieve even this.

If the pensions dashboard is charged with providing people with ownership of their pensions, it will not open this decade.

Open pensions can’t find pensions but can grant ownership

Pension Bee propose (and AgeWage seconds) that the  twelve providers be compelled by the FCA to open up pension data via open source APIs.

This is the only way to allow the transformative potential of open finance to be realised early enough to create happier, more prosperous retirements for a generation.

These 12 providers become the Directed 12 as the 9 Banks became the CMA9. Open banking becomes open pensions with the help of the open finance initiative.

We don’t need a dashboard or open pensions – we need both NOW!

The pensions dashboard should more properly known as the pension finder service. If it does no more than find the £20bn of lost pensions that the ABI and PPI confirm are currently lost, it will have done a great thing.

But the delivery of the dashboard is being delayed again and again because it is trying to do too much, it is trying to be everything to everyone and is doing nothing.

Pension Bee’s suggestion is radical and it’s simple. It allows the pension dashboard to crack on without any further arguments about what is on the dashboard (just telling us where our money is).

Open pensions then allows savers access to Pension Bee’s estimated 80% of data which can be accessed online in real time , because it arrives though open source APIs (digital gateways).

No doubt there will be many providers not on this list , who will want to , and be able to , adopt APIs very quickly. I’m thinking of Smart Pensions, Hargreaves Lansdown and Pension Bee but also many of the smaller master trusts and some of the larger occupational DC schemes.

There will be a long tail of occupational DC schemes and a few FCA regulated SIPPs , who will not be joining the queue any time soon. They will have their work cut out complying with the dashboards requirement that they provide access to membership inquiries.

Meanwhile, those providers inside the Directed 12 and those who want to join them, will need to sign up to a data template that will meet the needs of those who want ownership of their pensions. This data template (distinct from the standard for the dashboard) will enable people to see their funds, fund values, contribution histories and cost and charges on their account. In short it will allow them to see the value they are getting and the money they are paying for their investments.

It may provide more, it may give access to the individual holdings within the funds so that people can determine how responsible the investment strategy, it might even give people the chance to influence how their fund is managed.

We need a pension finding data standard and an open pensions data standard

What this boils down to is two data standards, a simple one to find our pensions and a much bigger one to find out about our pensions.

The genius of Pension Bee’s proposal is that it makes both possible quickly without compromising the aims of Government for pension ownership.

Like every great idea, it is radically simple. It is the key that unlocks the door and I hope that both the FCA and the DWP, who are the policy leads for open finance and the dashboard, adopt the suggested approach.

If they don’t, I could be writing the same blog in five year’s time.

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Lighthouse, the unions and BSPS


There is a story untold about Lighthouse’s relationship with the BSPS trade unions. It is one that reveals some alarming conflicts within the Union movement, specifically in the “affinity agreements” that gave union members access to free advice

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This clear offer of a benefit to the Unite member, does not mention any profit share to Unite on introductions. Similarly, Tim Sharp’s letter to Frank Field  in response to the Work and Pension Select Committee’s questions , does not reveal any payments to the unions from Lighthouse.

So what exactly was the nature of these affinity partnerships that were so popular with the unions? In August 2017, around the time when the British Steel Time to Choose was happening, FT Advisor reported 

Lighthouse has 19 “affinity relationships” with a number of employee organisations representing more than 6m members.

These include Unison, Unite, BA Clubs, Fostertalk and the Royal College of Nursing.

The popularity of these deals suggests that there was substantial motivation for employee organisations to sign up . Until it is clear what that motivation was, suspicion will continue that there were substantial introductory fees involved.

So what went wrong for Lighthouse at BSPS?

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Quilter (formerly Old Mutual, formerly Skandia) have recently purchased Lighthouse for £40m. For a firm operating 400 advisers this is a small consideration and suggests that it knew that there were some “warts” in the deal.

The first 30 warts are a group of steelworkers for whom Quilter has made a provision of £9m as recompense for poor advice.  Readers may wonder how provision can run at £300,000 per client but this is quite possible.

The BBC reported on one steelworker (Richard Bevan) who claimed shortly after transferring, that he’d been short-changed by £200,000. Richard didn’t use Lighthouse but I know of steelworkers in Scunthorpe who did and had a similar grievance.

The issue is highly technical but is summed up in Bevan’s testimony to the BBC,

He said he was advised to leave the scheme even after he had been written to by the BSPS warning him that a revaluation was under way that could mean he had much more in his savings pot than previously thought.

The reason that Bevan lost so much was because he took his money out before the revaluation happened. This is what New Model Adviser refer to when reporting on the Lighthouse 30. Except the technical reason for the revaluation wasn’t that £500m had been put into the scheme but that the scheme moved from an equity to a bond funding basis.

This meant the scheme discount rates changed and they more or less doubled the transfer values for younger members like Richard Bevan and the Lighthouse 30.

The £500m injection into the scheme meant that the scheme actuary could recommend  a value adjuster on the transfers be partially lifted, this wasn’t the tigger for the change in discount rates.

That Lighthouse proceeded to transfer out members who were in the same situation as Richard Bevan beggars belief. Not only did they do it in the full knowledge of an impending hike in transfer values, but they did it in front of the unions who they had been introduced by.

So “doing the right thing for the Lighthouse 30” may mean using up every penny of the £9m already set aside, but there are 300 of these transfers and Paul Feeney, Quilter’s CEO is saying that the remaining 270 are all to be investigated – even those that got the higher transfer value.

Why such largesse from Quilter?

While it is unlikely that the larger group will be as expensive to deal with as the first thirty, it looks like the next 270 will cost at least as much as (and probably more than) the price Quilter paid  in the first place

This suggests that the cut-price £40m Quilter paid for Lighthouse was in full knowledge of the cost of recompense.

But why is Quilter not asking questions of the introducers in all this? And why are the unions so quiet about the deal?

Back in 2017, IFAs queried why Lighthouse was taking 3% of the transfer value and a 1% pa management fee on the money transferred.


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One remarked that he’d expect union members to be getting a substantial discount over what appeared to be Lighthouse’s standard rate at the time.

The same might be said of Paul Feeney’s largesse. Why is Quilter on the hook for it all? Is there something more valuable than the cost of restitution that needs not be disturbed?

Screenshot 2020-03-16 at 14.01.53

What were the unions doing?

300 transfers at an average transfer value of £400,000 represents a lot or money flowing out of the scheme. If the unions who introduced Lighthouse had any kind of quality control over the advice that was given, they surely would have been concerned by what was happening.

Did the unions get duped, did they turn a blind eye or were they actively in on it?

None of the above sounds good news for the unions involved which may explain why they have taken a backseat in the redress for members , led by Al Rush and Phillipa Hann.

We now know that Active Wealth Management, were transferring on an industrial scale thanks to access to the workplace created by their introducer, Celtic Wealth Management. But the 300 transfers advised on by Lighthouse seem to have come about by the same route. While it would be wrong to compare Celtic Wealth with Community and Unite, it’s hard to absolve the unions of responsibility for what happened.

The price of affinity?

“Affinity” worries me. There is nothing wrong with unions being paid for introductions so long as it’s over the counter. But this looks like there were under the counter transactions going on and sooner or later the price Lighthouse paid for the deal cut with the unions will be revealed. When it is , then it will be the worse for the unions .

It would be best if transparency prevailed and the unions fessed up to their commercial interest in all this money moving.

The alternative will be a gradual disclosure which could become messy. For the ongoing relationship between Quilter- Lighthouse and the various affinity arrangements in place , to prosper, it would be best to clean this mess up.

As Andy Agethangelou would say “transparency is the best disinfectant”.


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From helping your clients to helping yourself.

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The severity of the falls in stock market put in jeopardy the revenues of asset based businesses. Put simply, if the markets fall 50%, so do revenues. What were profitable business models become unprofitable and sooner or later costs catch up on cashflows and businesses have to change or crumble.

What might have started as a correction for clients , is clearly now an existential threat to asset managers of all kinds, but most especially businesses that rely solely on revenues from assets under management or advice.

Messages from governments are stark, we are in this for the long haul. Sir Patrick Vallance over the weekend, Boris Johnson last night and Donald Trump overnight – all pointing to a detoriating picture that points inevitably to recession.

It is not just people who need to be in lockdown, so do businesses. Put simply – we all need a plan B.

We cannot look to our clients for help

To suppose that we can manage this situation by putting up prices is daft. We really are in this together. Clients whose assets fall below trigger points , should not be required to pay more, though I fear that many wealthy clients will lose their right to cheap management and find they are protecting their wealth managers rather than their wealth.

Businesses where tiered fees work in reverse need to manage disclosures very carefully. Many wealth managers will be writing to clients to tell them (as MIFID II requires) that they have breached a 20% loss, the double punishment of higher fees is unlikely to do down well.

Those rewarded by “ad valorem” fees are at least in the fortunate position of controlling their revenues, unlike those who must chase fees. Fee collection becomes considerably more tricky in a falling market.  Those of us in financial service must expect an increase in uncollected invoices, and a lengthening of the debtor’s register.

We must remember that however bad it is for us, it is considerably worse for many of our clients.

Managing costs

Many of the costs we incur , from season tickets to commercial rents are unavoidable. Variable costs, such as bonuses may be discretionary, but many in the financial services sector are formulaic and have already accrued.

The hard truths of a recession are that people lose jobs ,  businesses go under if they don’t.

Headcount , premises and remuneration are not guaranteed to rise and Plan B may need us to take some tough decisions on all three.


I give myself some credit for having enjoyed over 35 years in financial services. The 1987 crash, 9/11, 2008 and now 2020 are all milestones.

As I make my way around a deserted City today, I will see people – as I did yesterday, giving space to others on pavements.  This act of consideration was also an act of self-preservation.

This is how we must go forward. We must be considerate to our clients but we must conserve our capacity to deliver to them when things get better again.

In our planning, we can demonstrate to our clients the value of the plan, if not plan A, maybe plan B.

There is a fine line between the bravery of soldiering on regardless and being agile to change. What has happened over the past quarter, but especially over the past three weeks has been a genuine game-changer for many business plans.

We now must re-group and meet the challenges of the next few months accepting that things aren’t turning out quite the way we thought!