Contract based DB- Redington v Cardano- no blood!

Full house in St Albans for the Redington/Cardano match-off. Morinho v Ferguson, Ali v Fraser, Cowell v Walsh-we had been promised blood.

Things started poorly, a weak show of hands from the audience on who was supporting who (needed some hand helds to give us anonymity). Central theme of the evening was established- pension people can’t take decisions.

Kerrin delivered a laid back presentation, careful stuff as half the people in the room had worked with him (the other half were busy tweeting Robert). Common ground was established- pension schemes aren’t doing very well – poor governance- lack of good and timely decision making. Then a chart talking us through the various shades of Fiduciary Management defined by “scope” and “implementation”. Then the good bit, a line in the sand drawn between implemented consulting (Redington) and Fiduciary Management (Cardano). Fiduciary Management is implemented consulting with an investment management agreement.

My take-Fiduciary Management is contract-based DB.

Then Robert, sporting preppy jumper and all-american smile. Lots of shadow boxing- talk of common ground- mutual respect tra la la- audience getting restless- where’s the blood? Then the killer blow. “Fiduciary Managemnet is like a parent outsourcing the bringing up of a child to a nanny for eighteen years”- visions of Oliver in the workhouse- nasty Beedle Kerrin -“can I have some more” etc. Not a dry eye from the one or two trustees in the audience.

Kerrin’s having none of it. Back he comes- “totally inappropriate analogy, you have no kids- I have 5 etc.”- things hotting up. Talk of partial outsourcing- boarding school. Kerrin claims Robert is playing emotional games, Robert stands his ground- fun!

The analogy becomes a conceit “what would you do if your child became sick?”- Avgi Gregory. Where’s this going? The PPF decamps to Great Ormond Street? Both combatants pick up on this as “injury in the kindergarten”, Kerrin plays the accountability card- sick kid on my watch- litigation- end of Cardano. Robert backs off, he doesn’t have an IMA to do childcare- the line in the sand becomes deeper.

Robert tells the tale of the Northern Rock MD not knowing what a CDO was and the Goldman Sachs MD who could explain a CDO and a CDO squared. His point- don’t employ new technologies if you don’t understand them.

(Guess the Goldman Sachs guy didn’t see the taxi*.)

Options to throw my curveball-“what have fiduciary managers learnt from Bernie Madoff -Kerrin?”, “what have we got to learn from investment bankers re governance -Robert?”. Not the time and place. More questions, summings up- another vote- hung vote- honours even.

A good test for NAPF meetings is what happens afterwards- normally docile chats about who has met who- not tonight. There may not have been blood but there was engagement. Two heavyweights- sadly no video of the event and no hand-outs so this may be the only public record.

Events like this happen too infrequently. Well done Hewitt for getting it organised and well done NAPF North for providing the platform. Well done Kerrin and Robert for a proper debate. You wouldn’t have expected less from these two but how many consultants would have taken the risk of getting it wrong?

* This is the last line of a song called “the day I died” which is very good (and very relevant to Lehmans et al).

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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5 Responses to Contract based DB- Redington v Cardano- no blood!

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  2. Interesting point of view.Thanks for the post. – In Beverly Hills…they don’t throw their garbage away. They make it into television shows. – Woody Allen Born 1935

  3. henry tapper says:


    Thanks for the comment James.

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