The roof leaks, the walls are crumbling but the House of Commons is still the seat of British Government. Andy Agethangelou has used the momentum he and his team have built up to set up a Transparency Summit (no less) within its hallowed walls.
Here is Andy’s press release. I am very pleased to be going on Monday and hope Andy, Tom and all represented will be able to advance openness and fairness. He’e’s the press release.
TRANSPARENCY STRATEGY SUMMIT ON PENSIONS, AT THE HOUSE OF COMMONS
Tom Tugendhat MBE MP and Andy Agathangelou, creator of the Transparency Task Force, are Co-Chairing the first Transparency Strategy Summit on pensions anywhere in the world and it is taking place at the House of Commons on 12th September.
Two things make this a Summit of special significance:
Firstly, the extensive line-up of organisations due to be represented, which includes The Department for Work & Pensions, The Financial Conduct Authority, The Pensions Regulator, The Advertising Standards Authority, The Pensions Advisory Service, The Pensions Administration Standards Association, HM Treasury, The Association of British Insurers, The Association of Member Nominated Trustees, The Association of Professional Pension Trustees, CFA Society UK, The Financial Reporting Council, ShareAction, The Local Government Association, The Trades Union Congress, Which?, The Chartered Institute for Securities and Investment, The Pensions Policy Institute, The Association of Consulting Actuaries, The Chartered Institute of Public Finance and Accountancy, The Bank of England; plus Daniel Godfrey, former Chief Executive of the Investment Association.
Secondly, the focus of the Summit, the primary purpose of which is:
‘to begin to build consensus on the best way to protect the interests of the UK’s pensions-saving public through full disclosure on all the costs and charges they are paying but not being told about’.
Tom Tugendhat MBE MP explains:
“I am a strong supporter of free markets and competition, that’s why I am a Conservative. I do not object to companies charging a fee for the services they offer. I don’t mind if the fees vary wildly; that is not my business, as long as they’re made clear to the consumer. But in the pensions and investment sector they aren’t and that’s a problem. Transaction costs,
on-going charges, management fees and exit costs tend to be hidden, included in the fund or not clearly advertised. Hidden fees make proper comparison, and therefore competition, impossible. That’s just not right, whether you look at it from a market efficiency or a social justice point of view.
Our Transparency Strategy Summit on pensions is a sensible first step in building consensus on how to move towards pragmatic and consumer-centric solutions that are a win/win/win; for the consumer, for the efficacy of government policy and for all right-minded market participants.
Hidden fees in pensions is a substantial public-interest issue now and we really mustn’t under-estimate the size of the prize, because in our post-Brexit world the UK has every reason to want to be the world-leader in financial services transparency. Business and investors like transparency, so if we’re the very first country to get this right it will be highly beneficial for UK Plc. The stakes really couldn’t be any higher so this initiative is well worth us working together for”.
“The range of attendees at the Summit shows there’s a broad coalition of interests coalescing around the idea that there ought to be full disclosure on the costs and charges across all savings and investment products, starting with pensions. Progress begins with realism, so we need to admit there’s an opacity problem and accept collective responsibility for helping to solve it. We’ll be discussing the key issues in a candid, constructive and collegiate manner, building consensus and helping to drive forward the change that the sector needs and the public deserves”.
The Transparency Strategy Summit will include regulatory updates by The Department for Work and Pensions, The Financial Conduct Authority and The Pensions Regulator. The DWP and the FCA are working together on pension costs disclosure, as required under Section 44 of the Pensions Act 2014 under which they are charged with bringing in new pensions costs legislation during this parliament. The FCA is part way through its far-reaching Asset Management Market Study and due to publish their Interim Report soon; and the Pensions Regulator have just updated the Value for Money Section of their new DC Code; another line of regulatory activity that is directly relevant to the topic.
Other comments about the Transparency Strategy Summit from key participants:
Lord Cromwell, private banker and investor: “Successful, long-term business is ultimately based on trust, deriving from complete clarity between all parties. Given the billions of personal and institutional wealth tied up in financial investments and the degree to which these underpin financial security, it is astonishing that some of the true costs to investors are still opaque or inaccessible. This is corrosive to trust, and therefore to participation in key areas such as pensions”
Margaret Snowdon OBE, Chairman of PASA: “It is vital that the pensions industry unites to make openness second nature in everything we do. Transparency is not just about costs and charges, it is also about how we communicate and the way we work with each other and our customers. If the public could trust the pensions industry, there would be less need for voluminous and confusing explanations. The Summit is an important step towards restoring trust.”
Daniel Godfrey, former Chief Executive, the Investment Association and Ambassador, the Transparency Task Force: “Lack of transparency in pensions costs is a significant deterrent to investment and causes mistrust. This short changes individuals, the economy and society. The Transparency Strategy Summit is needed to start turning words to actions.”
Ralph Frank, CEO DC (UK) at Cardano, and a Leader of the Transparency Task Force’s Costs & Charges Team: “Concerted action from Government, regulators, industry and savers is required in order to achieve meaningful and consistent disclosure of costs and charges across all types of savings and investment products. How can an informed buying decision be made at any stage of the chain, from setting up the product to it ending in the savers’ hands, if the buyer is not aware of the service they’re paying for and/or the price of the service?”
Henry Tapper, Founder of Pension PlayPen: “Millions of new retirement savers deserve more from workplace pensions. They need better protection from IGCs, a fully inclusive charge cap and above all they need a cheaper, more transparent means to save. At its best, our pension system does well, but there are still too many dark places into which we need to shine light. This summit will shine that light.
Anthony Filbin, Member, Association of Professional Pension Trustees and Chairman, Capital Cranfield Trustees: “The timing of the summit is fortuitous given the forthcoming Pensions Bill which, alongside the new DC code of conduct will encourage Trustees to review costs and charges with greater urgency”
Jonathan Hoare, ShareAction’s Director of Policy: “A lack of clarity on what schemes, and ultimately savers, are paying for investment management makes it hard to judge whether the system as a whole is properly aligned with savers’ best interests. Greater transparency on fees and charges, as well as on where money is being invested and how investors are engaging with companies, is a crucial part of an investment system that truly serves savers, society, and the environment”.
About Tom Tugendhat MBE MP
Member of Parliament for Tonbridge and Malling
Tom Tugendhat was elected MP for Tonbridge and Malling in May 2015. Before Parliament, he served as military assistant to the Chief of the Defence Staff (adviser to the professional head of Britain’s Armed Forces) and contributed to publications around the world on foreign affairs and politics. Tom served in combat in Iraq and Afghanistan and with the Foreign and Commonwealth Office. He helped establish the National Security Council of Afghanistan; the first non-warlord administration in Helmand, Afghanistan; and maritime security operations along the Atlantic coast of Africa.
Tom began his career as a journalist in Lebanon before creating a public relations firm for international clients operating in Beirut, Damascus and Amman. He returned to London to work as a management consultant on financial products in EU and EU-accession nations before moving to the City as an energy analyst. He commissioned and joined the Intelligence Corps, Reserve.
Tom graduated in Theology and Religious Studies from Bristol University and went on to take an MPhil in Islamics from Cambridge University. He is fluent in French and Italian. His Arabic, Dari, Spanish and Helmandi Pashto are now pretty rusty.
About the Transparency Task Force
The Transparency Task Force is a campaigning community dedicated to driving up the levels of transparency in financial services, right around the world. We believe that higher levels of transparency are a prerequisite for fairer, safer and more efficient markets delivering better value for money and better outcomes to the consumer.
Furthermore, because of the correlation between transparency and trustworthiness, we expect that our work will help to repair the self-inflicted reputational damage that the financial services sector has suffered for many years. Opacity is a festering sore on the face of financial services. It needs to be treated.
Our approach is collaborative, cooperative and consensus-based. We are striving for a win/win/win, whereby the consumer, market participants and the efficacy of government policy all benefit as a direct result of the work that we do.
Our initial focus of attention is the workplace pensions market as it offers the opportunity to positively impact the welfare of millions of people in old age. We are calling for the pensions and investment industries to place much greater emphasis on transparency and value for money moving forward, in line with the direction being given by governments and regulators around the world. This will be welcomed by all right-minded market participants, pro-consumer professional associations and trade bodies.
About Andy Agathangelou
- Founding Chair of the Transparency Task Force www.transparencytaskforce.org which is campaigning for greater levels of transparency in financial services, right around the world
- Chair, Pensions BIB, the collaborative group that created the free and open data standard for auto enrolment www.papdis.org to help drive up efficiency and data security in the payroll and pensions markets
- Governor, the Pensions Policy Institute www.pensionspolicyinstitute.org.uk
- Member, Advisory Board to the Investment Association’s work on Cost Disclosure
- Former Founding Chair, Friends of the Association of Member Nominated Trustees www.amnt.org which represents lay trustees involved with the effective stewardship and governance of occupational pension schemes. Successes include the Red Lines Voting initiative
- Former Founding Chair, CIPP’s Friends of Automatic Enrolment www.friendsofae.org which has brought together market participants involved in implementing the Government’s AE policy.
He has worked at a senior level in the pensions and investments sector since 1986 and has developed a reputation for bringing together influential and collaboratively-minded people to help overcome market challenges.