Short but not that sweet – Fidelity’s IGC report





Fidelity has in Kim Nash, the only female Chair of an IGC, infact two out or three of the IGC’s independent members are woman (Rachel Brougham of BESTrustees being the other).

If awards were given for brevity and diversity, Kim Nash’s statement would be a winner. But they’re not and while this is a highly polished document, it is simply not doing enough to be praised.

Fidelity may not think it needs independent governance and it may be right. Fidelity markets itself to large employers who employ actuarial consultants and either have their own pension trustees or an employer funded pension committee.

It relies on these experienced advisers and pension experts to get feedback and this is a virtuous circle that benefits everyone. Fidelity are not in the market for the auto-enrolled workplace pensions of smaller employers and the report reads of a pension world that has remained pretty well untouched over the past twenty years.

So it struggles to find anything for Fidelity to do better

The way Fidelity supports you could be altered to make communications and online models more specific to your particular situation.

■ Continue developing the communications sent to you to make them as clear and engaging as possible.

■ Ensure that employers with bespoke investment strategies continue to employ an investment advisor, to ensure that the investment strategy remains right for you.

If you think this sounds complacent- you are right. There are a whole load of things that Fidelity could and should do better. The final bullet in particular is concerning. Is the IGC concerned about the member or the investment advisor? Were a client to dispense with an advisor, wouldn’t Fidelity step in to provide at default investment strategy? Is it the IGC’s job to promote the need for an investment advisor?

Fidelity’s IGC could do well to read Share Action’s report on Workplace Pension Stewardship.

Instead of taking the lead and bringing to the UK the excellent work on Stewardship Fidelity is pioneering in the USA and Canada, the UK organisation has been all but silent on this subject.

Similarly, the excellent understanding that Fidelity has on transaction costs both within funds and in the reassurance of funds overseas may or may not be happening in the UK. We have no idea because the issue doesn’t merit a mention by the IGC.

Fidelity are one of the world’s greatest fund managers and know more than most about defined contribution workplace pension schemes.

I had looked forward to reading this report as an exemplum, instead the report is little more than a compliance audit with few insights.

Is this engaging, does it educate and does it empower policyholders to make more use of their Fidelity plan?

As for value for money, the IGCs  assessment process is perfunctory.

For a pension plan to offer good value for money we would expect to see certain criteria present

The level and quality of benefits that you receive.

The level and quality of the communications and service you and your employer receive from Fidelity

The costs associated with the plan.

as is it’s conclusion

After undertaking the assessment detailed above, the IGC believe Fidelity’s pension plans offer you Value for Money.


My assessment of this Chair Statement.

I cannot endorse this statement which does little but tell policyholders they are in safe hands.

Its value for money assessment is poor and shows no engagement. It does not educate members on what constitutes value for money and does nothing to restore confidence. I give Fidelity’s value for money assessment a red.

The document is extremely well written and what we get is concise and precise. I hate the faceless photos of boardrooms which depersonalise the document; despite this I am prepared to give the tone of the document green.

However, I am really disappointed that the IGC has made so little effort to get inside the Fidelity funds proposition and challenge for improvement.

Workplace pensions are extremely prosperous territory for fund managers and Fidelity benefit from global relationships with many large companies that make for low distribution costs and high margins.

Auto-enrolment has made already profitable schemes – more profitable. I would like the Fidelity IGC properly assess the money members are paying for DC services within the workplace schemes offered by Fidelity and test them for value.

I would like them to properly interrogate Fidelity about the work it is doing ensuring that transaction costs both within the funds and from Fidelity’s own platform are as low as they can be.

I would like to see how Fidelity are exercising their powers as the owners of the funds on their platform for social good.

As I can see no evidence that the IGC has done anything but the bare minimum, I am going to give the Fidelity IGC a red for its effectiveness.

About henry tapper

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