The conflicts of interest facing pension trustees



Robin Powell of the Evidenced Based Investor, interviewed me this week. You can find the original interview here, Robin’s work is important, I hope a few readers will come to his seminar- advertised at the bottom of this piece.

One of the most exciting things about helping to campaign for greater transparency in UK asset management over the past few years has been the chance to be part of a community of highly motivated and principled people.

The likes of Chris Sier, Andy Agathangelou, Con Keating and Gina Miller have devoted huge amounts of time, and most of it totally free of charge, to improving outcomes for consumers.

Very much part of that group is the pensions consultant HENRY TAPPER. Henry is a supporter of the Transparency Task Force, of the growth in workplace pension take-up through auto-enrolment, and of the move towards collective defined contribution (or CDC) pension schemes. His blog, Pension PlayPen, is a go-to resource for everyone involved in institutional investing in Britain.

In this interview Henry discusses the current state of institutional investing and the conflicts of interest that exist within investment consultancy. He also explains why trustees have been so slow to adopt a more data-driven, evidence-based approach.


Henry Tapper, how did Pension PlayPen come about and what was your vision for it?

The Pension PlayPen was conceived as a place for pension professionals to congregate and have fun. It was at the time when the Bribery Act was coming in and many of my friends thought the days of taking corporate bribes were over. We ganged up and did our own entertainment out of our own pocket without having to trouble the corporate gift register!

The PlayPen has a big following and is now an important part of the UK pensions landscape. What’s the secret?

I’m surprised that you think that it is important — that’s very flattering! We’re still going after 11 years and Pension PlayPen has evolved into a website for helping employers choose a workplace pension, a 10,000-strong LinkedIn group and a blog with over one million reads. I think it’s about consistency, sticking to your guns and having a clear vision of what’s right!

I notice you aren’t afraid to speak your mind!

I live in a constant funk that I’ll be taken out! Seriously, I’m like rhubarb; the more you beat me up, the better I feel!

Something else we have in common is our support for the Transparency Task Force. What do you feel the TTF has achieved?

A lot of people laughed at Andy Agathangelou when he started out and he’s proved everyone wrong. Andy brings people together because he’s so positive. He’s consistent, persistent and unremittingly optimistic. That’s a pretty amazing combination! TTF is now a factor in corporate decision-making and that’s the mark of Andy’s achievement.

Human nature being what it is, though, we’re never going to see total transparency in investing, are we?

It’s back to TTF. If those who have the power to change things feel encouraged to do so, then they will. Right now, Andy’s creating the conditions for change and it’s now up to the awkward squad — me, Chris Sier, Gina and Alan Miller, yourself and others — to drive home the advantage.

As you know, I’m an advocate of low-cost index funds. Why do you think trustees still tend to prefer actively managed investments?

We need someone to blame. Choosing an active manager who performs reflects well on trustees, and if the manager fails, it’s easy to blame the manager for the trouble you’re in.

Does the continuing reliance on hedge funds surprise you?

Our governance structures are slow moving, we were slow adopters of hedge funds and we’re late to abandon them.

As you know, private equity seems to be flavour of the month, and yet PE has a big transparency issue, doesn’t it?

The Railways Pension Scheme lifted the lid on the costs incurred by private equity managers. Any fiduciary allocating to this asset class now has to explain why they’re investing in such an opaque form of investment. There’s a lot to be said for private equity, but transparent it is not.

One problem I’ve noticed is that trustee training is often provided by product manufacturers. That’s a clear conflict of interest, isn’t it?

There’s an industry in trustee training and as the question points out, it creates an agenda which points the trustee at investing in products which generate a margin reckoned to be among the highest in any industry in the UK.

The FCA is currently looking into competition in the investment consultancy sector. What’s your view on that?

Investment consultants are important to the proper functioning of occupational pensions. But they have put themselves into a conflict where they find themselves marking their own homework. The Competition & Markets Authority review must help them resolve that conflict by ensuring they are genuinely independent of the products they advise on.

Finally tell me about your latest project, AgeWage?

AgeWage is my new venture to help ordinary people find out how their pension pots have built up and whether they’ve had value for money. I’m very excited by the opportunities this gives ordinary people who struggle to understand what’s happened to their pension savings  — or how to spend them!

Thank you for your time, Henry. And keep up the great work you do on behalf of investors.

Henry Tapper is one of the delegates at our free educational seminar, Evidence-Based Investing for Trustees, in London on Wednesday 17th October, which we’re holding in conjunction with the Cheltenham-based financial planning firm RockWealth.

As well as me, the speakers are Lars Kroijer, the former hedge fund manager turned indexing advocate, and David Jones, Head of Financial Adviser Services (EMEA) at Dimensional.

The seminar runs from 0830 to 1030 at the Amba Hotel, Charing Cross, WC2N 5HX. There are still places left. If you’d like to attend, simply email Sarah Horrocks at

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to The conflicts of interest facing pension trustees

  1. George Kirrin says:

    I thought the Investment Association were asking for the DC cost disclosure to be scrapped? TTF seems to have been rather silent about this?

  2. henry tapper says:

    Recidivism from the IA is based on them finding that in the very short term there can be “positive slippage”. Short-term reporting measures are the plague of the pension industry! I have not turned my guns on the IA’s pathetic position yet, but will do

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