The FCA has produced a measured, thought-through but ultimately facile paper on transfer advice.

The FCA did not make it to the Great Pensions Transfer Debate and it is just as well that this paper was published after not before the 19th June.

For the paper really does little to protect the consumer, causes considerable disruption and fails to address the issues of those who have set up and run occupational pension schemes. If we had read it before going to Peterborough, I doubt our conference would have been as optimistic as it was.

This paper is a missed opportunity and here are 5 reasons why!

Here are the five things which should have been in the consultation but aren’t.

1. A firm statement on contingent fees. The paper is silent, the FCA are pointing to COBS but AJ Bell are reporting over 50% of IFAs are effectively taking advice as commission from their in-house investment solutions
2. Encouragement for trustees and scheme administrators to help IFAs through the creation of a single template questionnaire . Most of the timing problems on transfers come from non-standardised questionnaires.
3. Encouragement for trustees to allow scheme rules to provide partial transfers so IfAs can split CETVs with an amount remaining for scheme pensions and the balance available for greater freedom
4. Inclusion of adverts (digital or otherwise) promoting transfers as financial promotions (whether from lead generators or not)
5. Prohibition on the use of leads generated from unregulated firms as a source of transfer business.

The FCA’s paper, which you can read here, is out of touch with the reality of today’s market.

Money is flowing out of occupational schemes at a destructive rate. One scheme which I am connected with is reporting outflows of £250m per month. Such flows are destabilising the investment  strategies of DB schemes, creating a severe strain on pension scheme administrators and destabilising the confidence of many people in the schemes they are relying on.

Much of the money flowing out of DB is doing so regardless of critical yields. I have in my possession three reports that have been forwarded me where the critical yields are in excess of 8%, one in excess of 10%. Add to these yields the costs of investment in full-priced SIPPS and you are needing over 12% pa or a return 10% over inflation to meet the scheme guarantees! And yet these reports are recommending transfer.

To suppose that the scoundrels who write this bullshit are going to be any more responsible because they assess covenants and use stochastic modelling is to be naïve in extreme. The abuse of customers which is rife abroad and bad enough at home will not be solved by requiring advisers to use more sophisticated report writing services.

This week, a group of good people have been in the high court listening to the arguments of QC as to what should become of what is left of their pension scheme. The scheme is called ARC and when they finally know what is theirs , they will move on to find out what they will have to pay in excess tax to get their benefits. The only people not in court are the villains who set Arc up, they are in Spain and similar – and they are still setting inappropriate pension schemes up and cajoling new cohorts of innocent decent people into them.

In the meantime, the funnels into which people’s retirement dreams disappear, are still open wide.

the scammers list

Google Ads , Facebook and the digital advisers of all the tabloids are selling digital space. This one sits on the Daily Mirror site , here’s one from Financial Advisor .co .uk

Ros Altmann, the scammers new best friend!

Worst of all, these very sites are now aping Ros Altmann, our former pension minister endorsing the liberation of guaranteed benefits. Ros has been quick to hail the FCA’s paper in a blog. 

But sadly Ros’ list looks  just a more sophisticated version of the scammers list! 

Ros Altmann’s list

She is delighted that the FCA are no longer discouraging IFAs from rescuing people from failing DB plans but “waking up to the new landscape for pension transfers”.

The new landscape is one that most IFAs are very familiar with, it is the apple held out by Eve to Adam, delicious and offering untold knowledge. It is an apple that only too easily could see IFAs banished from Eden.

The last time Ros piped up on transfers she was widely broadcast . Look out for her latest blog to be abused in a similar way

Careless talk…

Far from protecting consumers , with this paper, the FCA have just opened the door for the scammers and invited them to the table.

Where are you when you’re needed Ros?

Ros did not come to Peterborough for the Great Pension Debate. If she had, she would have heard close to 300 people involved on a day to day basis with transfer calculation/advice and administration thinking about the decisions “diversely, responsibly and capably”. I chaired and listened – I was hugely impressed.

Ros has not been seen at the High Court or spent time with those whose pensions have been ripped from them and who now face bankruptcy either from the trustees (much of the pension is out on loan) or from HMRC, who want 45% of invested monies, monies which are mostly gone).

Ros does not spend time with pension administrators or pension managers having to cope with the huge flows out of schemes created by what sometimes seems like panic-transferring.

Nor will she have to live with the long-term consequences of these transfers. The drawdowns that dry-up though poor strategies, high execution costs and unrealistic withdrawal rates. There are great advisers who will manage their businesses for 20 years and hand them on to other great advisers, but it is hard to pick them today.

In reality , most of the money coming out of CETVs is being invested in SIPPS which are likely to become destitute of good management over time. This is the awful prospect facing those who pay for advice on the cheap and accept the twaddle that charges don’t matter.

By ignoring these harsh realities, Ros and the FCA and the Treasury are allowing the conditions to spread that have led to the carnage in the nineties, have pension victims in the  high court today, and will doubtless lead to countless disappointed retirees in decades to come.

When doing nothing pays

There is another way of managing people’s money. It does not involve taking a CETV, it doesn’t even involve looking at a CETV, it simply involves people taking a scheme pension for the rest of their lives.

Instead of listening to scaremongering about BHS and Tata, people with defined benefits could ask their Trustees for a clear statement about the likelihood of their scheme paying benefits in full. They might even ask the Trustees for its most recent employer covenant assessment – or at least the edited highlights without confidentialities broken.

They would almost certainly find that their Trustees are well advised, that the scheme is either in surplus or has a proper deficit recovery plan and they may even find themselves being asked to become a trustee.

Instead of the provocative calls to actions from the scammers (which echo the blogs that Ros writes) people could see how much care and attention is paid to the management of the schemes from which they will get paid their pension. Far from being the greedy beneficiaries of your money, most trustees are unpaid and are acting out of a sense of duty. Those professional trustees who are paid are extremely accountable.

As for the FCA’s paper, it is an exercise in irrelevance. Everything in that paper is rehearsing what good advisers already know and do. Meanwhile scoundrels are doing untold damage and the FCA and tPR seem powerless to do much about it.

Another opportunity missed.

Mr Bucket Head’s 15 seconds of fame

Mr Bucket Head wore the stand out costume of the evening.

Theresa May dressed up like a Fish Finger but was outdone by Mr FishFinger,

Mr Fish Finger lurks behind Tim Farron

Photos courtesy of Chris Chivers.

Of more moment is this brilliant comment posted on this blog by Colin (the Eagle)

The Democratic Unionist Party now look like the Tories preferred coalition partners. The DUP, which is the biggest Unionist (ie pro-UK) party in Northern Ireland, are often treated as though they are just the same as the other Unionist party they have essentially replaced – the Ulster Unionists.

The DUP are another thing entirely. They have strong historical links with Loyalist paramilitary groups. Specifically, the terrorist group Ulster Resistance was founded by a collection of people who went on to be prominent DUP politicians.

For the Tories to end an election campaign which they spent attacking Corbyn for his alleged links to former Northern Irish terrorists by going into coalition with a party founded by former Northern Irish terrorists would be a deep irony.

Commissioned by G Osborne

I have not had such a violent reaction to a blog this year as to “this blogger’s a reluctant Tory“. It clearly deserves this.The Tories aren’t going away, as Prospect quipped – they are the never ending Tory.

They may be immortal but they are not immutable and there are people within that party who both want change and are open to new ideas.

I know this also to be the case with other parties, the Labour party has views on pensions much closer to mine, I would not want to change them.

So if there is such a thing as a tactical dissenter, that is me. I would rather not lie about my intentions and I would like people to know that when  I put an X against the execrable Mark Field, conservative candidate for City and Westminster, it will be with the greatest of reluctance.

I may be saying “good-bye” to many good friendships as I press “publish” on this one. Here goes….

Foot note

– more positively – read this!  http://www.itv.com/news/2017-06-07/real-politics-is-back-out-with-the-bland-easy-choices/

Had I the heaven’s embroidered cloths,
Enwrought with golden and silver light,
The blue and the dim and the dark cloths
Of night and light and the half-light;
I would spread the cloths under your feet:
But I, being poor, have only my dreams;
I have spread my dreams under your feet;
Tread softly because you tread on my dreams.

W. B. Yeats

Over the second half of the year, a number of  occupational schemes migrate status. Some , like BHS will enter the PPF or at least the PPF’s ante-room.

One or two more will migrate into a Regulatory Apportionment Arrangement (RAA) which you can read about here.

The British Steel Pension Scheme (BSPS), currently sponsored by Tata is well down the road to becoming an RAA, the Hoover Candy scheme has recently been granted permission to move into an RAA.

So members of migrating schemes are faced with choices which present closing windows of opportunity. You do not need to be a behavioural scientist to know the power of the “buy now while stocks last” close.

I was not surprised to read in the FT another highly responsible article on pension transfers from Jo Cumbo , which published this statement from BSPS Trustees.

“The number of transfers completed during the year to March 31 2017 was 482 (the comparative figure for the previous year was 170).”……: “Included within the figure of 482 would be a very small number of current and former senior managers, consistent with the numbers overall.”

Management showing proper restraint

The wording is precise and correct. Trustees are mindful of the Ilford Ruling where the Regulator ruled against well-informed pension scheme members taking advantage of un-reduced transfer values prior to a corporate insolvency sending their scheme into the PPF. This is behind the defensive positioning of scheme and sponsor.

Tata declined to comment. But it is understood that no senior executives involved in talks over separating the pension fund have transferred their pensions. The pension scheme trustees, comprised of both company and member-nominated representatives, also declined to say if any of these representatives had transferred their pensions over the past year.

Schemes that are properly managed and governed

Schemes like BSPS and Hoover Candy operate to a high standard of governance. That standard – we would hope – would be maintained, whatever happened to the member’s benefits.

There is no reason to suppose that the RAAs set up for Hoover Candy and BSPS won’t be run as well as the current schemes. Nor is there any reason to fear the PPF. As I have written recently, there are some members who may – because of personal reasons, be better suited by being in the PPF than an RAA or even the original scheme.

Restraint needed from advisers

I have had some fairly vitriolic comment from some IFAs who point out that it is a no-brainer for members heading for the PPF to “cash out” and take a CETV.

Part of this may be a natural revulsion with the 10% haircut in immediate pension that members take on PPF migration. But John Ralfe is right when he tells the FT

“BSPS has improved its cash transfer values in the last few months, to reflect the scheme’s lower risk investment strategy. The fact that a member transferring now gets more cash, may explain the marked increase in the number of people transferring.”

Infact, the numbers of transfers mentioned by the BSPS Trustees are in line with figures we have seen elsewhere. I do not think they spell out a rush for the door.

There are 126,000 people who have or will have pensions from the BSPS, of them 33,000 are able to cash-out their pensions. 482 is a very small percentage of the potential CETC population.

I have not seen equivalent figures for Hoover Candy or indeed BHS or any of the other schemes in the PPF assessment period. However I would be surprised if there has been a rush to any door.

The more strident wing of the advisory community who consider pension freedoms not only a right but a universal opportunity should also show restraint

Restrained cautioned by employee representatives

I very much liked the comments of Community- the steelworker’s union.

“Steelworkers have already made tough choices necessary to secure the future of their industry, and the ongoing uncertainty about the future of the BSPS is extremely difficult for scheme members.

“All scheme members must be given the choice ….and this must be delivered. “We would urge members to think carefully before making long-term decisions regarding their pension.”

It is hard for those of us in white-collar jobs with the security of a liquid job market to imagine what losing your job in  Port Talbot is like. I remember speaking to a group of Allied Steel and Wire workers in Cardiff in the mid nineties, the loss of their pension on top of the loss of their jobs left them doubly desolated.

Nowadays , available pension security is higher, but insecurity among steel-workers must be high- as Community point out.

It will require great restraint and understanding among financial advisers talking with BSPS members, to remember that however easy we may see for a CETV to add value, it is not going to replace the security of a BSPS, BSPS RAA or a PPF pension.

Indeed, the options available after taking a CETV are all potentially loaded with future insecurity.

“We would urge members to think carefully before making long-term decisions regarding their pension.”

Indeed.

Further reading

The FT article Tata Workers cash in Final Salary Plans can be found here; https://www.ft.com/content/78cfbc0c-46c9-11e7-8519-9f94ee97d996

If you are an IFA and want to consider these issues in greater depth, come to the Great Pension Transfer debate at the East of England Showground near Peterborough on June 19th. The event is free and will attract over 300 IFAs to listen to Rory Percival, Steve Webb, Gregg McClymont, Alan Smith, Michelle Cracknell and many others.  You can still book a free place using this link

Had I the heaven’s embroidered cloths,
Enwrought with golden and silver light,
The blue and the dim and the dark cloths
Of night and light and the half-light;
I would spread the cloths under your feet:
But I, being poor, have only my dreams;
I have spread my dreams under your feet;
Tread softly because you tread on my dreams.

W. B. Yeats

.

To his credit, James Baxter of Tideway (who I have criticised in a recent blog for selling not advising) , has posted a reasoned response. The key matter for me is whether members of DB schemes are being panicked out of them by the prospect of falling CETV rates. I post my views in my response to James’ self defence. Reading both comments – lengthy as they are, may be helpful in understanding the fundamental dynamics of the great transfer debate. I post both James’ comment and my response without further comment, if you haven’t read the blog in question – it is linked here

RESPONSE FROM JAMES BAXTER OF TIDEWAY

Its a shame you did not come to the conference and hear the talk and subsequent Q&A session that put these slides into context.

I agree with your comment that CETVs are non negotiable. We speculate that the reductions in values offered in the schemes mentioned is down to increased outflows through the transfer option and trustees obligations. If you have a better explanation I would be keen to hear it.
The BA scheme reduction was announced in their ‘Trustee’ news letter which can be read hear:
https://www.mybapension.com/resources/news/naps_trustee_newsletter_2015_Q4.pdf
This pre announcement caused a rush for the exit door…not us. RBS gave no notice to their changes in the summer of ’15 , SGN made a similar announcement at the end of 16 for a forward date with the same panic effect on members as the BA announcement. Again nothing to do with Tideway, but as an adviser active in this space we get to deal with these panicked members.

The panic in members is also caused by the likes of Tata, BHS and the media not Tideway. To the contrary we spend time reassuring members of FTSE 100 blue chip company schemes with resilient covenants, that in fact their benefits are going to be paid in full and fear of this is certainly not a reason to consider a transfer.

I’m sure if we met Henry, aside from establishing a shared love of boats you would quickly recognise that we are one of the good guys. We have a great website, issue plain English guides and work hard on our PR. Aside from this we do no selling. All our advisers are employed on generous basic salaries without any incentives around specific cases or business volumes. All our inquiries are in bound from members who have usually read our guides, thought about there options and have sensible plans and ideas as to how to take advantage of pension freedoms and a generous CETV. We facilitate transfers to DIY platforms, other wealth managers and advisers as well as offering an end to end service for those who want that. Our 1% contingent fee is both competitive and hugely popular with consumers, it actually makes it easy for them to pull out at any time if they decide to stick with the scheme benefits and some do as you would see if you read the testimonials on our website. We are absolutely not pushy and do get a huge amount of repeat business from schemes where we have become the trusted firm to use.

Mercers are now predicting around 40% of DB actives and deferreds will want to transfer. The Pensions Regulator tells us that probably 80,000 members transferred in the 12 months to 31/3/17, Tideway has completed around 1% of these by volume and 2% by value. We are not alone in meeting an increasing level of customer demand.

How many DC pensioners are buying index linked annuities at NRD these days? Not many, and quite correctly. Who given the choice would lock in capital at today’s annuity rates and can predict that the income they will need in their 60’s will be the same in their 80’s and 90’s. That’s assuming they can any way afford an indexed annuity to meet their age 60’s and 70’s income need, most are a country mile away.

I lost both my parents before age 75, my parents in law in their mid 80’s can live on two state pensions per month quite happily and have a DB benefit to spare, but just had a £25,000 stair lift fitted after one fell and broke a hip, try doing that on a defined benefit. My 95 year old next door neighbour gets three visits a day at home costing in excess of £2,000 a week, again try doing that on a defined benefit. I think I have a pretty good comprehension of what retirement looks like.

Fixed life time incomes bought at today’s interest for 60 year old’s are unlikely to prove fit for purpose. It therefore should surprise no one, especially an actuary, that 50 to 60 year old’s offered such large sums of money will prefer flexible access to a conservatively invested fund over an annuity.

Yours

James Baxter
Tideway

In this weekend’s FT, Merryn Somerset-Webb asks us to imagine ourselves a Government strapped for cash to meet rising costs of social care and struggling to find a source of revenues.

.. late last year Britain’s Financial Conduct Authority established that the average profit margin of UK based asset management companies is 36 per cent against an All-Share average of a mere 16 per cent — you have no taxation-related way to get at it.

The article stops short of calling for the dementia tax to be levied on asset managers, but suggests that cost transparency could in time lead to a redistribution of wealth from the City to Care, via the savings pots of Britain’s savers.

It is vision that will find favour with those in the Transparency Task Force but it is a vision not a policy, there are – as Merryn’s article points out, various caps already in place but there is no rule that says that savers cannot invest in high charging fund management schemes, nor will there be. It is simply unenforceable.

There are alternatives; the Government can – and in my view should, promote a simple value for money measure to show the chances of a high and low cost manager achieving and out-achieving. The trick is to use data wisely.

We need data

Data is out there and it can show comparative performance accurately; there is however no trusted source for that data to cover all the options a consumer has. For instance, there is no way of properly comparing the performance of NEST, People’s Pension and NOW against the performance of L&G, Standard Life and Aviva. The Data isn’t marshalled!

Data is out there and it can show the risk taken to achieve results. comparative performance data can be organised on a risk-adjusted basis to show the value that you are paying for- though no such mechanism currently exists.

Data is also out there to show the true cost of fund management, the money lost through “slippage” and direct fees that cannot be recovered by the consumer because it is in the hands of the fund management “industry”.

Data that is organised

If the data is out there – can we find a way of organising it? I think the answer is “yes”, though whoever does that organisation will need a leg-up from the regulators- the market cannot be expected to organise itself and the Government cannot hope philanthropy to achieve such a mammoth undertaking. There has to be intervention, if not in further capping, than in ensuring there is proper benchmarking with results open to all.

The benchmarking of rivals, whether sports teams, or financial services providers is a brutal way of showing who is cutting the mustard. Football managers are sacked for comparative under-performance but fund managers are able to prosper even when they are shown to be performing battle.

Last week, some big-wig at F&C kicked up a stink when Morningstar downgraded his fund for having high charges (the multi-asset funds do). He argued that he should be judged on a more sophisticated measure (perhaps he is). The problem is that consumers have no access to the conversation – it happens in the private pages of financial journals.

And when Vanguard very publicly launch a service which brings the cost of fund management down by between two and three times, this important information is also buried.

The truth is that fund managers and pension providers fear benchmarking almost as much as they fear price-capping. Both leave bad practice exposed, price-capping is simply an extension of the competitive pressure created by benchmarking.

Data that is available

But back to Merryn’s argument.

If we are to have a price-capped funds business then we will have imposed a control of a beast for a while, but the beast will break out of its pen – using its creativity to defeat the regulators , rather than benefit consumers.

If we go the benchmarking route, we need to have popular awareness of what good looks like and general enthusiasm for getting value for money from the financial services purchased. We have to recognise that most of us will not have the interest or the capacity to choose for ourselves, we will need advisers, trustees, consultants and IGCs to do this for us. And they will need the data organised in a proper way with the help of Government.

The distribution of digestible data is critical to the transfer of value.

The means of getting information to the people who take decisions is changing. The Government is making it possible for people to see information about their investments through pension dashboards, I am seeing interest among those who organise payroll data (the software suppliers) in providing information on the workplace pensions they help manage to employers and their advisers.

The chances are that by the end of the decade we will have access to the kind of performance data that will expose the weak managers and promote the strong.

I think that this is the way forward – and I suspect that Merryn agrees. Price caps are there for breaking, but if we have savvy consumers we have a mechanism to keep a lid on back practice that cannot be broken.

I hope that with the help of others, we can provide a lasting means of transferring the value that sits with the City to the care we must pay for in the coming decades.

Further reading

Merryn Somerset Webb’s article; Cap asset management fees to free up cash for social care

https://www.ft.com/content/6f3bc5a6-4137-11e7-82b6-896b95f30f58?myftTopics=MGRhZGJiNDYtZDBkZC00NzI5LTk3NDktZjJkN2NmNWY2NzQw-VG9waWNz#myft:my-news:grid

This article is about the costs NEST is incurring, not to criticise those costs, but to publicise them as benchmarks to drive other provider costs down.

I had the privilege yesterday of having lunch with Richard Lockwood, NEST’s Finance Director. I was in the mood to talk costs as I spent the rest of the day at Accountex. Much as I enjoyed Accountex, the discussion with Richard was the highlight of the day.

Richard’s background is as a financial controller, Kingfisher, Home Retail and World Duty Free. He came to NEST because he knew about scale and cost control.

Obsession

The word that re-occurred throughout the meeting was “obsession”; clearly the guy is obsessed by measurement. The grand plan, as outlined by Robert Devereux to the Parliamentary Committee, is his plan, his measurement of NEST’s current debt, projections of future debt and the longer term projection of NEST self-sufficiency (2038) are his. They are based on an understanding of the unit costs of keeping records, interfacing with employers and members and investing the money. Clearly there are variables and it wasn’t until he had reasonable certainty on those variables that he could happily  publicise these projections .

The numbers were with the DWP last October and were only disclosed to Parliament some six months later. This suggests the political sensitivity surrounding them.

Measurement and accountability were themes that impressed me.

Repression

However, I remain less impressed by NEST’s arguments about its social purpose which still appeared muddled.  NEST has always declared itself to be operating in a new space where standards are set because no service has existed before. We might call this “greenfield”.

The major expense that Richard incurs is the payment of Tata- who manage NEST admin. The contract with Tata was re-negotiated in 2016 and runs to 2023. We do not know the terms of that contract but I got the impression there is not much about it that doesn’t sit at the front of Richard’s head.

The other expenses, associated with marketing NEST and investing NEST’s money are similarly not open to public scrutiny but , as our conversation had it, part of the NEST obsession with value.

Concession

Here the conflict between public service and commercial enterprise is most acute. NEST’s scale (both now but particularly projected) enable it to target economies in record keeping, administration and investment administration and money management, that should be ground-breaking.

Unlike many of their competitors, NEST do not carry the corporate overhead of legacy business nor need it share the unrewarded costs of re-using legacy systems and processes. NEST is greenfield and can – like other newly established master-trusts, take advantage of the latest technology to minimise outgoings.

This it has done; NEST is lean and mean and should have the lowest unit costs of any DC workplace pension provider. So why isn’t it publishing these costs as the aspirational benchmark for its rivals? If NEST is providing a public service, it should be helping to drive down not just its own costs but those of workplace pensions as a whole.

This also goes for investment costs which (I am sorry to say) are still undisclosed , sitting behind NDAs which NEST- unaccountably – entered into at the point it set up. It is high time that these external costs were revealed. The argument that NEST secured super-low deals with UBS, State Street and others- on the basis that it would keep the prices secret should cut no ice with anyone.

1. It is in the public interest to know what “best prices” are from these providers.
2. Without knowing what NEST is paying, we cannot assess value for money
3. NEST should be leading and not acquiescing to “common practice”.

If common practice is to keep fees hid, then we can have no progress on Vfm nor can we move towards lower fees for workplace pension provision. The annual management charge, which includes not just investment costs but marketing , governance and administrative outgoings, is no measure of NEST’s value or the money it is spending. It has no practical value in assessing value for money. To do that, NEST’s trustees must know and report on the efficiency of each aspect of NEST’s costs at something of the obsessive intensity as Richard Lockwood.

It is simply not enough for the general public to be told that all in the garden is rosy, we need to see the garden, the roses – and (where necessary) the compost. When I say “we”, I mean those people who are trying to assess what good looks like – that includes consultants, but also NEST’s competitors and the outsourced suppliers who should be benchmarking their costs against NEST’s.

Until NEST reveals what it is paying, there will be no NEST standard for us to measure investment management, investment administration, record keeping , marketing and governance costs against.

We need the same obsession that Richard Lockwood has with cost control , to be displayed in cost disclosure.

For NEST is not like other providers, as it keeps telling us, it gets its new business on a massive inertia pitch – it is the Government supplier and is hovering up employers at a rate of 1200 a day (a disclosure NEST is happy to make).

It should have nothing to hide and – since it is enjoying the munificence of a tax-payer subsidised loan, it should be putting back into the workplace pension community , the information that community needs to benchmark costs and lower them.

NEST has been in the past guilty of going it alone (most notably in not helping to create a joint industry standard for data-interfaces). PAPDIS came too late because PAPDIS and the NEST data standard should have been one standard.

The same could be said about value for money reporting. Instead of going it alone in the obsession with costs, NEST should be sharing its cost reduction measures with its rivals, to drive overall efficiencies’ through workplace pensions.

Instead Richard still mouthed the old platitudes about market practice which have prevented consumers from getting fair value as long as I have been working in pensions.

Let’s be clear. NEST must tell its suppliers that it is abandoning its NDAs and publishing its unit costs for administration and the costs it is incurring for fund management and administration. If it cannot do this, it should ask Government to step in and break the contractual terms with its suppliers that are preventing it.

Nothing less can do. There can be no concession to the commercial interests of the market when the market has failed us so long. The Asset Management Market Review, the Office of Fair Trading report and the Retail Distribution Review have pointed to market failure in financial services – some things have changed, but market failure persists.

NEST owes us £539 million of favours and that number increases to £1,218,000,000 by 2026. That is money that has been and will be spent by NEST’s members, they have to pay it back, they have a right to know that that money is well spent. I have no doubt, knowing NEST quite well, that it is well spent. What I don’t know is how well spent and those numbers become the greenfield benchmark to which other providers can aspire.

“If women were in charge, the 2008 financial crisis wouldn’t have happened”- Christine Lagarde.

 So why aren’t there more women in pensions?

I’m a 23-year-old woman who works at Quietroom, a communications consultancy. As a relative outsider to the pensions world, I was looking forward to this month’s Pension Playpen lunch, which was asking: why aren’t there more women in pensions?

I wanted to know how diversity was being talked about in an industry which seems to be run by men. So I was relieved and pleasantly surprised by an hour long discussion which was insightful, respectful, and where female voices were heard loud and clear.

Why is diversity important in the first place?

One of the ideas we kept coming back to was that diversity leads to better decisions. When people with different perspectives and backgrounds tackle a problem, they think about it for longer, and more carefully. They have to consider how it will affect people who aren’t like them.

We talked about studies which looked into how different groups handle a problem-solving task. A group of 4 friends will have a great time doing it, and report that they did brilliantly. But as it turns out, their success rate is a lot lower than the groups which had to swap a friend for a stranger. These groups may have had less fun, and a less easy ride reaching a consensus, but introducing a different perspective made for better results. Disagreement and difference leads to better decisions. Familiarity and homogeny leads to decisions which are more rash, more selfish, and replicate what’s gone before. Which brings me to the financial crisis.

‘Women have different ways of taking risks … of ruminating a bit more before they jump to conclusions’ (Christine Lagarde)

There’s good reason to think that it wouldn’t have happened with women in charge. Women tend to consider more facts when assessing risks or opportunities. Which means women tend to take less risks. And if we know anything about the financial crisis, it’s that it was the result of some short-sighted, arrogant and reckless decisions.

You might think this would bode well for women in the financial industry. In the aftermath of near financial ruin, brought on by misplaced confidence, it would probably make sense to embrace an approach which was more deliberative. More measured. Less typically ‘male’.

But it seems that the ability to take risks is a key part of getting ahead in this industry. By ‘taking risks’, I don’t mean investing massive amounts of money into mortgage-backed securities on the shaky assumption that house prices weren’t likely to decline, sparking a chain of events which led to the near collapse of world’s financial system. No, the kinds of risks we talked about were things like applying for a job even if you don’t meet all the entry requirements. One of us mentioned a study which shows that men will apply for a job if they meet 60% of the requirements, whereas women will only apply if they meet 100% of the requirements.

‘If I don’t know about something I’ll know it by tomorrow. Therefore I do know everything about everything’ (Scott from The Apprentice)

Another personal risk you might take day-to-day is speaking to someone even if there’s a chance they’re not interested in what you have to say. The women in the room shared experiences of everything from board meetings to my philosophy seminars from undergraduate days, and our suspicions were confirmed – in most settings, men tend to dominate discussions, at the expense of women who have valuable things to say.

Being averse to this kind of risk – the kind of risk we take when we choose to suggest an idea in a meeting at the risk of not being taking seriously – affects the kinds of job roles women are seen (and see themselves), as being able to do.

For example, think about the traits we typically think a good salesperson has. Confident. Persistent. Willing to do almost anything to secure the sale. Doesn’t take no for an answer. In other words, all the risk-embracing traits women are trained from birth not to exhibit.

‘Such a nasty woman’ (Donald Trump)

And who could really blame us. Look at any example of a woman who’s progressed to the dizzy heights of management, or leading a country, and once you get past the analysis of the skirt she’s wearing that day you’ll find a slurry of commentary about her character. ‘Bossy’, ‘ruthless’, ‘abrasive’, and ‘hard to work with’ are common choices to describe women who have dared to step above their station.

So it seems we can do no right. If we quietly and competently get on with our job, we don’t progress. (One of us talked about her frustration at time and time again seeing younger, less qualified men overtake her in her company). And if we do muster up the confidence to chase a promotion – and manage to be picked over men who have been referred through a boys’ club recruitment process – then we’re bloody difficult.

As we reached the end of the discussion, it was clear it had gone well. We all agreed that the time had flown by. Discussions like this, which identify the problems which are holding women back in their careers, are becoming more and more common. What we need to do now more than ever is figure out how we’re going to fix them.

Share your experiences

Having these kinds of conversations brings things that are hidden in plain sight into public scrutiny. The more they’re talked about, the quicker these practices will become unacceptable. So please join in the conversation.