The IGCs must not slip into the pocket of their provider

I hear worrying reports of various IGCs meeting and pronouncing their tasks “too hard”. Phrases such as “I don’t know how this would play with my provider” have no place in an IGC’s lexicon but they are reported as littering these conversations.

Lest we forget;-

IGCs represent the interests of the member and not the provider.

Equally worrying is the appointment of sales guys to be the corporate representatives on IGCs. I absolutely oppose this and am extremely disappointed to hear that Aegon have appointed Paul Bucksey (Head of Workplace) and Dougy Grant (MD of existing business) to the IGC Board.

Paul and Dougy are good guys, their job is to drive profit from the books of business they look after and to get new business. They are salesmen; which means that their day jobs are about profit maximisation for the shareholders of Aegon, how can they possibly represent the interests of the member over the provider?

Their appointments have passed un-commented on in the press. I am disappointed. Once again, I am left to ask the obvious question, who cares about these IGCs?

Where are IGCs going on value for money?

The FCA’s asset management survey asks searching questions about value for money. It asks why questions are not being asked by investment consultants to ensure that value for money is obtained. The truth is that there is no one prepared to hold the IGCs to account.

Without ongoing scrutiny, the IGCs will slip back into the pockets of the providers and the governance that they were supposed to promote, will be pocketed too.

If the investment consultants of the actuarial consultants and the advisers working within corporate IFAs and Employee Benefit Consultancies were not so supine, this would not happen. But advisers take their cue from the press and the press is prepared to publish press releases issued by the insurers without comment.

Let’s be clear – there is now a clear expectation that the 2017 Chair Statements will deliver a clear message on the value for money of the provider and if we can’t see how the statement was derived, you’ll get a good kick from this blog and I don’t want a nasty legal letter or phone call if I call for better.

There will be no reason to hide behind the FCA’s lack of guidance this time. Nor will there be any excuse for letting your provider off the hook on early exit penalty fees.

Governance – who really cares?

There are good organisations who care about good governance, Share Action, PIRC, Manifest and they are prepared to stick their head above the parapet and call bad practice.

I’m pleased to see providers like People’s Pension promising to be more transparent. I am quite sure that without the efforts of Catherine Howarth and her team, the dire standards of governance we’ve seen from People’s so far would persist.

But where is the pressure from the consultancies, what sanctions are being applied to those providers whose IGC reports last year just didn’t make the cut?

As I prepare for another round of IGC chair statements (and trustee chair statements) in the new financial year, I am wondering just how much scrutiny these IGCs feel they are under right now.

The answer, from everything I’m hearing right now, is pretty well none at all.

Taking the FCA seriously?

Well guys (and it mainly guys), I hope that you have read the FCA Asset Management Study and I hope that you have absorbed the recent pronouncements on measuring money and I very much hope that by April you will have decided your measure for value for money and be able to give us a proper estimate of how much value we are getting from our workplace pensions.

While I am happy that you are looking at soft factors with NMG, customer satisfaction survey is of more interest to your provider’s marketing department than it is to me. I am prepared to put up with a hell of a lot of poor customer service provided my investments are performing.

I want some tough action between now and April and I want to see statements in April that show that you haven’t been (as reported) slipping back in your provider’s pockets.

One final thing – if I google “IGC”, I have to go to page three before I find anything (other than by me) about Independent Governance Committees. Perhaps you should be worrying about that too!