I mentioned in yesterday’s blog that the Government can no more prevent the proliferation of dashboards as Canute could have controlled the waves of the sea.
A better analogy than Canute is Cuchulain, the mad Irish Warrior who died fighting the sea with his broadsword
Spake thus: ‘Cuchulain will dwell there and brood
For three days more in dreadful quietude,
And then arise, and raving slay us all.
Chaunt in his ear delusions magical,
That he may fight the horses of the sea.’
The Druids took them to their mystery,
And chaunted for three days.
Stared on the horses of the sea, and heard
The cars of battle and his own name cried;
And fought with the invulnerable tide.
The invulnerable tide
And that “invulnerable tide” is with us today. It is driven by people who have money in pensions and want to find out where it is, how it’s done and how they can best spend it.
So far these people have had to go to financial advisers and pay them money to find them pensions. Many will already have paid other financial advisers to set the pensions up and most are fed up with the hassle they have to go to, simply to find out what they already own.
That tide is coming in and the longer we delay the establishment of a portal that gives them access to their information, the more likely we are to be flooded by this demand.
Uncontrolled, the demand for information will be satisfied not just by financial advisers but by those pseudo advisers offering people “free financial review” the people the Government warns us about.
The Government monopoly will not satisfy demand
If the Government builds a portal through which we can see all our pensions on a single dashboard, then people will find ways to capture that information by means of a process of data scraping , so that they can replicate that portal on a dashboard of their own.
This is how scammers will behave and it will lead to bad consequences, it will lead to money flowing to the wrong places, either through funds or directly to the scammers. It will lead to money flowing offshore into the kind of monstrous investments that get closed down every week only to reappear in yet more outlandish fashion offering us an 8 percent return on our money.
The reason that this will happen is that the Government dashboard will not be able to manage the secondary needs of people once they have found their pensions.Those need include working out what has happened to their money and taking decisions about the future.
The alternative to a single dashboard is multiple dashboards that get their information from the Government portal in a controlled and regulated fashion. And these regulated dashboards will help people answer the questions that cannot be answered by the Government because the Government neither wants to , nor is able to – advise people what to do next. This demand can no more be satisfied by the dashboard than it can by Pensions Wise.
Eliminating the grey zone
It wasn’t until reading a blog by Romi Savova that the penny on this dropped. Romi has recently joined the industry steering group and is one of the people tasked with getting the dashboard in place.
In this blog, Romi talks of a grey zone (the term was invented by Primo Levi for the blurring of victim and accomplice in Nazi death camps). The grey one Romi refers to is one where information is available but can be used to harm and self-harm – as we see in most poor financial decision making today. She concludes
The consumer owns their data and they will wish to share it. It is important that sharing is only permissible with trusted, authorised and regulated third parties. It is a myth that delaying so-called “commercial dashboards” will prevent the free flow of data. On the contrary, if we fail to consider, define and communicate data sharing protocols and expectations with consumers, any scammer will be legally allowed to scrape the data. Scammers thrive in the grey zone.
The view Romi has, and it’s one that I am beginning to better understand, is that a Government Dashboard has a role in finding pensions and that the Government has a role in defining how and to whom this data be shared.
Necessarily people will look to third parties to help them organise, analyse and understand their data and these third parties cannot be the Government – they must be commercial for there is no appetite within or without Government for a state controlled financial advisory service.
What will be delivered when.
In terms of tech delivery , there is always a minimum viable product and I see the Government’s dashboard as just that. It should be delivered by the end of 2020 and Chris Curry and his team should set a hard deadline for that – otherwise we will not get this thing over the line by 2024.
I think the minimum viable product is a pension finding service which is what the Government portal could and should do and I think that the protocols for finding pensions should be in place by the end of 2020. If your database is not capable of identifying who you hold data on and if you cannot link this to another database via an API, then there is something wrong.
I think that concurrently to the creation of the data finding service will be an authorisation process so that in the course of 2020, FCA authorised firms can apply to act as agents for customers who want to access data from the Government dashboard with the help of that authorised firm.
That firm need not access data by scraping, but by direct access to the data that is already available to the Government dashboard. In short , commercial organisations – authorised by the FCA, should be allowed to find people’s pensions to and through the Government portal, which acts as an authoriser – rather than a regulator.
What happens on the commercial dashboards?
There is a separate discussion to be had as to how information that appears on these commercial dashboards is presented. Romi’s view is that we should use the simplified pension statements pioneered by Ruston Smith with the help of Quietroom. I’m pleased to see she is fighting for this information to include the amount we are paying for our money to be managed as part of this simple statement.
There may be other things that might appear. I would like to see the AgeWage score we are pioneering appear as a matter of course. If AgeWage gets authorised, we may well ask to be authorised to run a dashboard, find pensions , help people with how their pensions are done and help people aggregate to the best pension for them.
But that is for the future.
The Bill is passed, let planning now begin.
What has blighted progress in innovating pensions has been uncertainty. We are familiar with the uncertainty of an unfulfilled plan in politics, and Brexit has undoubtedly impeded the progress of pension innovation – not least through the absence of legislation
I am pleased that I am writing on the right side of the reading of the Pension Bill and have this good news to communicate this morning. With so much going on – we should at least be thankful for this.
— UK House of Commons (@HouseofCommons) October 24, 2019
If you’ve enjoyed the references to Cuchulain, you can hear the poem’s author, WB Yeats – read these lines and more.