I don’t think I’ve ever heard mention of the “pension genome” , which may suggest it is a concept before its time.
To me it means the entire complex of products and funds from on which our rights to money in retirement depends.
Other than the state pensions, we could call it the product of that clichéd phrase – “the pensions industry”, though “industry” seems entirely the wrong word to describe much of what calls itself “pension expertise”.
Mapping the genome
In biological terms, ” the human genome project” means identifying and mapping all of the genes of the human genome from both a physical and a functional standpoint.
In financial terms, “the pension genome project” means identifying and mapping all the investable products and funds from both a “value” and “money” standpoint.
The attached presentation, I’ll be giving to some actuaries in Birmingham on Tuesday, explains what a pension genome project could bring to ordinary people.
Whether such a project can be carried out by a single organisation, remains to be seen. I have some hope that it can
- The desire for greater transparency, driven from the general public and some parts of the “industry”.
- The capacity to understand what we are buying through the work of groups such as Chris Sier’s IDWG
- The arrival of workplace pensions, bringing new standards of disclosure and re-defining value for money.
- The willingness of DWP, Treasury, FCA and tPR to come together to empower consumers to get better information
- The emergence of new technology (APIs) capable of centralising data in real time in dashboard style.
Nonetheless, a project so ambitious as to put a score against every pension product, every fund and every combination of the two, cannot be brought to fulfilment without great endeavour.
Mapping the pension genome
To me, the research on value for money that is going on, has the potential to restore confidence in pensions. If it is matched by the endeavour of Government to ensure that all of us can see all our pensions in one place, it gives a means to aggregate pots into one big pot , from which each person can organise their finances in later life.
It may be that we need the help of the financial researchers who sit within our great universities, to help with the project.
It may be we need big Government to kick down a few doors, where data is locked behind.
It will certainly mean accepting that some of the assumptions with regards embedded value within life companies, SIPP and even fund managers need reviewing.
But we can only properly move forward, if we can accept that all in the UK is not perfect and that there are better ways of doing things, than the way we do them today.
