Corporate codswallop from Aviva’s IGC

codswallop

 

Aviva’s IGC chair’s statement,signed off by Chair Inder Dhingra is very much a corporate effort. It reminds me of a tourist brochure sanctioned by the North Korean Government in which tourists respectfully thank their hosts for the fascinating insight they have been given. In short it is not very good.

Spot the independent.

Here is the team photo.

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Can you tell the Aviva representatives from the independents and can you spot who is on the committee and who is supporting the committee. Can you spot which of the “independents” claims to be a  “non-executive director of Aviva’s IGC”.

Robert you are not an Aviva NED IGC – if you are confused about your various governance positions, then perhaps you should review them.

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To me there are 5 Aviva people in this photo (one of whom actually claims to be a NED), there’s a high powered secretary and there’s Inder and Marcia. Do you see what I mean about North Korea.

Not good enough

The tone of the IGC Statement is deferential, words like “challenge” appear but there doesn’t appear to be much challenging going on. The report follows the Aviva line which is all about choice. Infact the statement actually links to the Aviva fund pages

For more information on the funds Aviva offers, visit here.

If this report is meant for members, I’d suggest the member is accompanied by his or her IFA, because if you “visit there” you are sucked into the Aviva Fund Centre and hence to the Aviva Funds Library  where there are 29 pages each detailing 20 funds available to the members of Aviva’s workplace pension funds.

It is simply not good enough for the IGC to wave its magic wand over this jungle of information. The report rightly notes that from April 1st 2016 (eg the day of the report’s publication), no further commission can be paid to advisers from Aviva products.

The cast majority of Aviva workplace pensions were set up on an “advised” basis and the justification for that advice was the 300 odd funds on the platform. But what happens now the advisers don’t get their commissions, who is going to guide people around the Funds Library? Clearly these questions are not being asked by the IGC who reassure us…

 

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Do you see what I mean about the North Korean tourist brochure?

What good is this?

One is left asking what the IGC did engage in , other than endless tours of Aviva run websites , call centres and boardrooms.

Aviva is facing a huge challenge with auto-enrolment, it is having to ditch its dependence on advisers and find a place in the market where its product can be recommended by accountants , payroll staff and particularly by book-keepers.

Aviva is having to find ways to integrate its product into the business processes of employers through the development of API technology, partnering with organisations that don’t get a mention in this report.

It is as if Aviva have carefully shepherded the IGC away from the sheds where the missiles are being built, the warheads prepared.

 


 

My assessment

  1. The position the IGC was adopting to value for money, and in particular, the assessment of value for money benchmarked against best practice gets an amber – the methodology is ok but there is nothing in the document that suggests any tyres have been kicked
  2. The tone of the document, especially whether it demonstrates it is written for members , gets a red – the report reads like an Aviva corporate brochure.
  3. Its capacity to address specific issues with the provider where member’s issues might be prejudiced gets an amber – clearly Aviva are cleaning up there act on legacy but whether this is anything to do with the IGC is far from clear)

Considering the importance that Aviva place on corporate governance (and they are the best of all insurers on the Share Action league table of responsible investors), it seems to regard the IGC as an adjunct of its marketing department.

If I was reading the report in the FCA I would be fuming, Aviva are bringing the concept of IGCs into disrepute and for its size and reputation in the market this is simply not good enough.

Let’s hope that I am not the only one who finds this report corporate codswallop.

About henry tapper

Founder of the Pension PlayPen, Director of First Actuarial, partner of Stella, father of Olly . I am the Pension Plowman
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