“It is one thing for a company to know my vacation shopping patterns or what media I like; it is another for them to access my entire financial history, including my investments”
So Rana Foroohar wraps up an opinion piece in the FT over the weekend. Her article was picked up by Gregg McClymont who commented on twitter.
— Gregg McClymont (@greggmcclymont) September 16, 2018
For Fintech – read Pentech?
On the face of it, a pensions dashboard gives opportunities to scammers to identify your pensions and target them for nefarious purpose.
Even well-meaning organisations could nudge you into decisions where the algorithm says “yes”, but you should certainly say “no”.
We had a conversation about pension awareness at our picnic on the Thames yesterday, One chap mentioned that two of his pensions were “untouchable”. He not only knew he had guaranteed annuity rates , but he knew there value, laughing at the attempts of first Norwich Union and latterly Aviva to buy them out. This gent had learned what he knew from reading the newspapers.
Another chap (he is 71) told me how surprised he was when he started getting his old age pension , he thought he’d be getting about £120 a week and he got £170 and that amount kept going up and up. He had no idea that he’d spent a working lifetime picking up entitlements to SERPS and possibly the graduated pension before it.
My point is that there is no such thing as a typical consumer and that financial awareness is both varied and unpredictable. I know people who have financially sophisticated who have been mugged by scammers and some of the sharpest minds have no financial education at all.
Without security, a pension dashboard will become a general database for salespeople. This cannot be allowed to happen.
For Fintech – sadly read Pentech….
We need a system that helps the smart be smart and protects those without a clue – from predators. The trouble is that artificial intelligence is not sufficiently advanced to make the distinctions I can make, after that picnic!
Let’s turn this round and look at data-sharing positively
We all need information to take decisions and without a service that finds our pensions, most of us won’t be at first base.
But we need to know more about our pension pots than their current value, we need to know the kind of things that my friends found out, through reading up or simply looking at their bank statements!
The pension dashboard can – given half a chance – do what the combined pension forecast was supposed to do twenty years ago. That is – give us a half decent picture of the future – at least in terms of pension entitlements.
But it cannot tell the man with GARs, not to cash them in. Nor can it explain to the man with the big state pension – why he got more (and what he gave up to get more).
Most importantly, it can’t tell people how to behave going forward, whether annuities, drawdown cash-out (and in the future a CDC) is best for their circumstances.
Everyone approaches these questions in different ways and my picnic yesterday told me that though algorithms are good, there is little to beat a face to face conversation.
The challenge facing the 94% of the population who are not planning on taking face to face financial advice – anytime soon, is how to have that conversation.
My pension picnic
We are a long way from having a Pen-tech picnic, the thought of us sitting on the banks of the Thames staring at our phones does not quite match the splendour of Lav’s lunch!
We will continue to share knowledge as we go about our business, to learn from each other. Last week, the Pension Geek Pension Awareness bussed made its way from one end of the land to another, spreading awareness by human interaction. I hope it went as well as the reports on social media suggest! I’m sure it did.
But for all the good that evangelising on Lady Lucy of the Geek’s bus does, we cannot reach out to those millions who need to have the conversation.
So – as Monday dawns – I’m back with dashboards, steering wheels and the motor engines to get people to see, steer and put their foot down for a good retirement.
This will be no picnic!