“Phoenix and the Island of misfit pensions” – how one IGC is making a difference.

misfit mascot 2

Phoenix – the island of misfit pensions.

It’s not much fun if your pension finds its way to Phoenix Life. It’s the pension equivalent of the Island of Misfit Mascots – the place where Peetie the Sexual Harassment Panda gets pensioned off to in the eponymous South Park episode, (see clip at bottom).

If you bought an NPI, Abbey Life , Brittanic, Pearl or Scottish Mutual pension, and you haven’t transferred somewhere else, then you’ll be in Phoenix. But don’t worry, you are in safe hands, because you have someone to watch over you. That Someone is David Hare, who runs the IGC. He and his team don’t make any bones about it, having a pension with Phoenix isn’t going to be great. But since most of the people in Phoenix aren’t likely to kick up a fuss and will just sit there like “sad pandas”,  it’s a good thing that the IGC is a good un.

Although, the Phoenix 2018 IGC report  doesn’t talk about it, there are likely to be a lot more Sad Pandas next year, when Standard Aberdeen ships Standard Life off to Phoenix. There will also be another sad panda IGC to be assimilated  (Standard life IGC 2018 report here).

I don’t suppose that Standard Life policyholders will want to be referred to as Sad Pandas, they’re a proud lot. But they’ve had a pretty rubbish time at Standard Life recently and many employers would swap the £100 per month they pay for Good to Go for a £0 per month Phoenix charging structure. OK, Phoenix fund performance is pretty dire…

Phoenix Hare 3

Phoenix 2018 IGC report


But then so is Standard Life’s

peer standard

Source – Salvus

Phoenix IGC does not have the benefit of top investment consultant Redington, advising them on how rubbish their fund performance is. Instead the IGC tells members how it is.

The top of those two tables is from Phoenix’s IGC report, the message is clear. Right now , Phoenix funds aren’t cutting the muster, aren’t giving value for money and even if you look at the whole table , you won’t find one fund that is consistently delivering above average returns.

Plus you are paying way over the odds for the privilege (another thing that Standard Life Pandas are used to). Pension Bee’s Robin Hood Index shows that in their  universe of pensions, Phoenix’s 1% charge is a lot more expensive than the average pension that comes Pension Bee’s way (0.78%). Smart people will take their money away from Phoenix and unless Standard can get some separation from the other sad pandas, smart people will get out of Standard Life.

Except, life is kind of sweet at Phoenix, as the IGC goes on to show!

Value for money (for sad pandas)

sad panda

The Phoenix IGC don’t make any bones about it. They know that Phoenix policies were too expensive and they are pleased that they’ve got Phoenix to cap charges at 1% pa.

They also know that the kind of people who keep their pensions with Phoenix may have some pension learning difficulties. So they’ve gone out of their way to make their value for money scoring system comprehensible.

Phoenix hare

This remarkably simple system is known as a “balanced scorecard”. I won’t be pursuing the Hare care bunch for plagiarism, but it looks rather like the scoring system my Pension PlayPen uses.

I might quibble with the “3” given to performance – (what’s good about all your funds consistently underperforming?) and  I might quibble with giving a 1% pa charge a top rating, but I can’t quibble with the simplicity of presentation. Swap that 96 for 66 and you’d get my value for money score for Phoenix, but heh – I don’t get paid by Phoenix (only kidding).

Actually, the only thing that most Phoenix policyholders should give a stuff about are investment performance and charges – the rest being fluffy – but I am learning to live with the idea of the “member experience” being important to IGCs , especially on the island of misfit pensions.

Within the (limited) scope and resource of the Phoenix IGC, I give it a green for value for money reporting. It is the only report I’ve read so far that benchmarks performance against other providers, it is the only scorecard that I can make sense of , and though the score is highly contentious, I can at least follow the argument.

If I was the Phoenix IGC – I’d be adding streaks of yellow here and there. Phoenix has not even tried to get to grips with the hidden charges in their funds, they have not explored (as Standard does) issues of risk adjusted performance and the scores for customer service and other fluff bear no relation to the feedback I get from policyholders and IFAs who find Phoenix’s service and comms, at best “variable”. There is something to build on for later years and other IGCs would do well to look at this simple method of doing things (and adopt it).

Engaging (sad pandas).

sad panda 3

As mentioned above, the best thing to do if you find yourself on the isle of misfit pensions (Phoenix) is to get back to the mainland and aggregate your fund into something better. But while you are staying on the island, isn’t it refreshing to have an IGC that speaks the language of everyday people.

Phoenix hare 2

Hare is a lay-preacher in the Church of Scotland and it shows! My translation of the above is “you should get the f**k out of Phoenix and back to the mainland.

But whether these messages are coded or not, the whole report is a straight response to the concerns that an ordinary policyholder would naturally have, being on the island of misfit pensions and the report is really engaging.

The IGC is never going to win Fintech awards, but I’m pleased to see that this year, they’ve found the hyperlink button and included lots of links to useful information.

I’m giving these guys a Green for engagement – I was engaged – and I’m not even a sad panda!

Effective (for sad pandas)?

sad panda 2

I’m struggling to really buy into the wonderful world of the Phoenix IGC as the consumer champ. OK – so a consumer has to be a chump to stay on the island but there remains a huge gap between mainland IGCs and what is going on here.

I’m not convinced by the sections on Environmental, Social and Governance policy.

I’m not convinced that all these policies really give access to all the pension freedoms

I’m not convinced that there is a common investment policy at work to deliver a best in class default fund.

Instead I see an island of misfit pensions with plenty of legacy pensions , none of which make a lot of sense and collectively make for a pretty dire population (of sad pandas).

I don’t diss what has been done, the report is proud of getting 60,000 policyholders cheaper pensions, and it should be, but there is really a lack of ambition here, appropriate to the provider, but in the final scheme of things – unsatisfactory.

Much as I’d like to live in the sunny uplands of David Hare’s perception of the IGC, I can only give it an amber for effectiveness.

In conclusion

Thank goodness for the Phoenix IGC, for its sense of fun, warmth – even adventure. IGCs are supposed to be on the member’s side and though I don’t always feel the IGC has quite broken free of Phoenix, I know they are as independent as they’re going to get;

The report barely mentions the “S” word, but clearly there is as much distance between the approaches of Standard IGC and Phoenix IGC as there’s water in the channel that divides the island from the mainland.

The report barely mentions Standard Life but the proximity of the deal makes thinking about what is coming next – an urgent question! I hope that we get the best of both worlds for Standard and Phoenix policyholders. Let’s have the rigour and resource of the Standard IGC but lets have the clarity and engagement of the Phoenix ICG too!

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to “Phoenix and the Island of misfit pensions” – how one IGC is making a difference.

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