How savers can change the world


Direct involvement with the way your savings are invested

I spent time (on Zoom)  with a young entrepreneur  whose business it is to get people to change the behaviours of companies they invest in.

I won’t go into detail about her company as it is aiming to sit within the service provided by workplace pensions and won’t be a consumer brand in itself.

But – as I understand it – this brilliant lady and those who work with her, intend that whether we have £50 or 500,000 in workplace pensions, we’ll be able to know what’s happened to our money and express our views on how their behaving.

This is a radically different approach to ESG than setting out to buy a fund that only invests in companies and assets with high environmental , social and governance ratings.

It says that wherever you are saving you can make a small but significant difference to the decisions taken with your money.

How do such things work?

The idea is simple .  A platform manager offering diverse workplace funds can show savers that their money is invested with companies they may or may not have heard of. Savers can chose to learn about the companies or simply look at the key voting issues that shareholders have and get involved. The kind of things people can vote on include director’s pay, the measures companies are taking to reduce emissions or their involvement in social issues effecting our or other’s wellbeing.

Each savers vote is aggregated and fed back through the platform to the fund manages who have the actual voting rights. This collective vote feeds through into the vote of the fund manager on behalf of all investors in the fund.

From small beginnings , such an approach could allow ordinary savers to gradually change the behaviour of the boards of the mighty companies that rule the world.

Why this matters to me

I passionately believe in the power of people to change the world we live in. I believe that new technology can give ordinary people a voice as powerful as Donald Trump’s. Indeed that voice can challenge the bad things that unfettered capitalism can do (like the US shale industry is getting challenged right now).

What savers have (pension savers in particular) is ownership of the means of production. There is nearly a trillion pounds in workplace pensions – most of it invested in the shares and debt of UK and overseas companies.

If only a tiny proportion of people could be mobilised to consider themselves as investors and to act like investors, then the impact on the behaviour of those who run these companies could be immense. Because people now understand trends, they can see that when ideas start trending they can quickly go viral and then those ideas become unstoppable.

Which is how change happens. It happens because of technology, because of the aggregation of data and because the results of all this voting can be presented in a powerful way in real time. Savers can change the world.

Why this matters to platforms

The great workplace savings platforms are run by NEST, Peoples, Now, L&G, Aviva, Smart, Aegon, Scottish Widows , Royal London and the consultancies.

They need to improve in two ways,

Firstly in ensuring funds on their platforms are invested responsibly.

These platforms are governed by IGCs and trustees who are charged with ensuing that the platform funds are managed responsibly. So far, this has been taken to mean on a top-down basis. Consultants are brought in to look at the funds and opine on how green they are. Provided that the fund managers can convince the consultants that they are doing their bit, the IGCs and trustees can state in their chair statements that they have done their duty.

But the FCA and the DWP are both unsure on this. There is in the pension schemes bill, an amendment which will mean trustees will have to measure what is actually going on within the fund’s investments. The FCA are currently conducting a review of IGC activity which is likely to take a dim view of what is commonly called “green-washing”.

Platforms need to do more than create work for consultants which allows fiduciaries to tick boxes.

Secondly in improving the level of voluntary savings

While “improvement one” is a matter of compliance with the requirements of policy makers and regulators, requirement two relates to the commercial viability of the platforms themselves.

These platforms run on the revenues from the funds which sit on their platforms – taken as an annual management charge. The more the funds, the more the revenues, as fixed costs are static , the more the funds – the more the profitability or viability of the platform.

Whether for profit or not for profit – a viable platform feeds back into shareholder or member value.

There is in the eye of platform managers a clear link between an engaged saver and increased contributions.

If they can find a way of getting savers to start thinking of themselves as investors, they are on the way to getting more in voluntary savings.

Why this matters to my business

AgeWage scores are about getting people engaged. When we started out nearly 18 months ago, we had it in our head to produce AgeWage ESG scores by somehow scoring the funds people invested in , using measures developed by businesses like Morningstar’s Sustainalytics.

We have moved away from this approach and now concentrate on engaging people with the value they’ve got from the money they’ve saved – a simple outcomes based measure which provides a simple benchmark – (how others have done).

But our scores do not help people engage with their savings. This does,

So I hope that the simple ideas pioneered by this young lady and her colleagues are adopted by the platform managers and accepted by the fund managers. If they are , then we will use the engagement we create to engage with their savings as investments by hooking people into the process these young people are creating.

And I will be promoting this idea to the Trustees and IGCs who I talk to so that more platforms can adopt this methodology. It will mean fund managers doing what the DWP and the FCA have been calling for – they will need to make their portfolios transparent to the people who save into them and they will have to listen to the opinions of those people as they exercise their vote.

And they will have good commercial reasons for doing so. Because if we are ever going to save enough to have a good retirement, we are going to need ways of engaging with our savings.

How savers can change the world

We are going though a crisis right now which is not about macro-economics. It is about microbes in people’s throats.  The health of ordinary people is tipping economies into recession and routing the markets. The lesson’s simple; people drive markets, maybe this crisis will allow the markets to start listening to the people again.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in ESG, pensions and tagged , , , , , . Bookmark the permalink.

3 Responses to How savers can change the world

  1. Another great article Henry. No doubt that after we have beat this Coronavirus the behaviour of millions will change from a nation of spenders to savers. Those 3-6 months worth of savings suggested by Financial Advisers seem a good idea now.

    I can see that we will start saving in our droves. However, getting people out of cash and invested will be one challenge. However, if we all feel we will be making a difference then that will be good for the individual, the companies involved and the economy.

  2. Martin T says:

    I applaud the sentiment which I think could complement existing initiatives like AMNT’s Red Line Voting. The Red Lines are pre-determined basic principles with clear voting instructions. That idea, if I have it correctly, is that investors whether in a large or small scheme (including those using the default investment portfolio – currently by far the majority) can still have influence over companies. So whilst it sounds like the initiative you’ve written about will work for the engaged, even encourage more engagement, Red Lines can be used by funds / schemes on behalf of the disengaged.
    See for more info.

  3. Pingback: Royal London IGC report – a welcome shift in focus | AgeWage: Making your money work as hard as you do

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