Travelling back from Newcastle last week in a much delayed train, the passengers in my carriage were trying to get to sleep. It was tough as the carriage were illuminated by the brightest of stip lights.
Eventually some of us summoned up the energy to find the train manager who – along with the train management team appeared to be having an extended cup of tea. One of us asked if the lights good be dimmed, the management team seemed shocked and the manager asked “why”.
We did eventually get the lights dimmed and those who wanted extra light used their individual spotlights above their head.
I thanked the chap who asked the question and he replied “so much for customer care”.
This is an example of a whole train being kept awake because the train management team weren’t paying attention to the needs of their customers.
It’s a good example of a failure in fiduciary duty, in the end it was a member of the collective who changed things and took control.
An example of fiduciary failure
There’s a good discussion about fiduciary care in this linked in post by Ben Fisher.
The post is a story on BBC about a Welsh worker who’s lost his pension savings through a Storepod investment . The investor bought the pod and thought that the trustee of his SIPP would make sure that the pod was used. It wasn’t and the pod is now worthless.
He said: “I phoned Store First, and a lady said ‘Your store pods are empty.’ I said ‘What do you mean they’re empty? They can’t be.’ She told me they’d been empty for two years… Nobody had contacted me to tell me.”
The investor had assumed that his trustee would look after him but the trustee did nothing (a git like the train manager).
Store First said they were never contracted to manage, advertise or let the storage pods – that responsibility, they say, lies with the pension trustee, Berkeley Burke.
It said: “Mr McCarthy has not purchased any store pods direct – he has instead arranged for a trustee to buy them, as part of his self-invested personal pension.
“We have asked the trustee, on two separate occasions, if they would like Store First to manage their store pods.
“The trustee has not however returned the management agreements we have sent to them. That is entirely within the power of the legal owners of the store pods. Store First cannot, and would not want to, force any investor to use Store First’s services to let out their store pods.
Where is the duty of care?
The notion that the customer’s interests come first, appears not to have occurred to Berkeley Burke.
No doubt they will argue that self-investment means just that – you manage the investment for yourself.
Judging by the incredulity of the investor, this notion hadn’t occurred to him.
So there you have it, investors being told to get stuck into an investment they have to manage themselves while the provider takes no responsibility for the investment other than to provide a platform and a tax-wrapper.
Who’s is the duty, the investor, the trustee or someone else?
I suspect that the original adviser (who went out of business shortly after recommending Store First and Berkeley Burke will not have the resource to compensate, if the Financial Ombudsman finds in favour of the investor.
That responsibility will then fall to the Financial Ombudsman and the Financial Services Compensation Scheme, funded by the guys who advise and don’t go bust.
The duty of care reverts to those who care.
Restoring confidence in pensions?
Clearly people expect those who manage their money to exercise a duty of care. In a recent conference NEST told delegates that when asked, members said that by investing in the Government pension , they expected the Government to provide them with a pension.
People don’t expect to be on the hook for managing risks when they have paid others to do just that.
Whether it’s NEST or the Berkeley Burke SIPP, people expect the people who they pay to manage their investments to manage their investments.
When this doesn’t happen, they are incredulous. Just as I was incredulous that the man who managed the lights on our train asked why at 11.45 pm people wanted the lights turned down.
I am sure that every time a complaint is raised against a railway company or a pension provider , confidence in the service is eroded just that little bit.
Which is why the customer experience matters every time.
When fiduciaries stop caring, we really will have to start managing our money ourselves.
It matters a lot that fiduciaries care, whether they are running NEST or a SIPP or simply advising.
The retail pension system, though it might appear to be every man for himself, is much more collective than at first seems. Compensation is collective and so is the perception of “care”.
I do not currently have to pay the FSCS levy or fund FOS but failures like the management of this man’s Storepods are damaging to me and my business interests.
I’m glad to see the proper outrage from those commenting on the article.
Someone has to care!