Precisely right – Scottish Widow’s IGC

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Mark Stewart- IGC Chair

Mark Stewart has issues his first Statement , having taken over as Chair of the Scottish Widows IGC. You can read it here.

It is brief , accurate and it has a distinct tone which I like. The contents page sets out its scope.

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The question is , can Scottish Widows IGC do in 22 pages, what others struggle to achieve in 70? Inevitably there is not the granularity in this report of Phoenix or Standard Life’s, nor the folksy charm of Zurich’s, nor the assurance of Royal London’s. What we get is precision and incision, brevity – not levity. The report generally succeeds.

Tone and structure

The precise tone is achieved through consistent vocabulary – he uses an old school vocabulary – talking not of members but “customers”. He talks of “computer system”s not platforms and avoids jargon by referring to legacy books as “old” and the new ones as “modern”.  He actually uses language to take difficult ideas away from the office and into people’s sitting rooms. This is an art.

Where detailed analysis is required – such as the assessment of Scottish Widows “premier portfolios”,  the narrative is clear and the conclusion dry

“with variations in performance since 2015 ranging from -0.6% to -1.7%. The IGC will continue to monitor the relative performance and value for money of the Premier Portfolios”

The tone is never effusive which allows the report to keep an acceptable distance from the IGC sponsor. This allows us to accept the IGC marking its own homework when it praises Scottish Widows’ governance, independent as the IGC is, it is a shop window for what goes on inside and this report is a credit not just to the IGC but to Scottish Widows. I give it a green for tone and structure.


The IGC are no spring chickens with only Ciaran Barr (of the independents) not in bus-pass territory. “Experience” appears in many profiles and I worry how effective the committee can be in understanding the needs of younger savers. I have in previous years criticised their statement’s tenuous grasp of  ESG as something embedded in the investment proposition, rather than as a  vegan – sideshow. Three out of the four independent members are alumni of Willis Towers Watson, which doesn’t say much for diversity and runs the risk of “group-think”.

Where the report shows the IGC as effective is in the traditional areas of funds, administration and governance. The section on “engagement” lacks conviction and here the “old school” feel of the report does not give space to innovation. There are some real strides being taken in the technology space, especially in the engagement of savers with their investments , I suspect that the appointment of a young CIO at Widows is a recognition of the need to get with the times.

With that gripe, I get the sense that the IGC really know their stuff on Scottish Widows product. Apart from the old and modern Scottish Widows products, they have the “new” Zurich book to oversee. The IGC seem rather underwhelmed by this acquisition and it will be interesting to see the results of this tart warning.

Some service targets were not met during the year. We do expect the service level to improve following investment in systems and staff.

Despite my reservations over the IGC’s current composition, I sense the authority of their commentary. I think this report shows the IGC as effective and I give them a green (though David Hare would have tinged his colouration)

Value for Money Assessment

The origins of the approach adopted by Scottish Widows is in the Pension Regulator’s original breakdown of VFM into five measures. Scottish Widows do not go so far as to weight these measures to provide a balanced scorecard and an overall score (an approach that is adopted by other IGCs).

The simplicity of their approach means that they can easily demonstrate what is working and where and I found it very effective

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It is effective if you are considering purchasing a Scottish Widows product , or if you are a regulator , or if you are an adviser. But it isn’t very engaging for ordinary members and frankly neither is the conclusion drawn by Mark Stewart

  1. Scottish Widows modern product is best unless you’ve got
  2. An old Scottish Widows product with guarantees you’re going to use
  3. Zurich gives best outcomes but there are dark warnings about “disruptions fo future service”

Zurich also gives an integrated drawdown product , a self investment option and better self service but the IGC are clearly very far from endorsing Zurich over the old Scottish Widows product (yet).  Hopefully this will give Scottish Widows a boot up the **** to get the Zurich “platform” in play for later this year.

Which brings me to my one major beef with the report, which is that it really doesn’t have a way of talking to members – most especially about the value they are getting individually for the money they’ve entrusted for decades to Scottish Widows.

I am already getting stick from IGC Chairs for banging my own drum but here I go again.

Saving customers are interested in their experience, not the generality of experience. They want to know how their pot has done both against what they could have got from  the bank and what they could have got elsewhere. In other words they want to see their individual rate of return and they want it compared (benchmarked) against how others did.

I hope that an outcomes based measure will be incorporated into Scottish Widows reporting in 2020-21 so that members not only have the chance to see how they did collectively , but test how they did individually.

Since the value for money assessment is limited to the top-down opinion of the IGC and has no quantitative analysis of member’s experienced outcomes, I’m not giving it the green I gave the statement for tone, structure and effectiveness – I’m giving it an amber.

Precisely right

If I was a customer of Scottish Widows (which I’m not), I’d have read this report with a fair amount of confidence that the insurer was going in the right direction. Clearly there are issues around funds and fund reporting and not just in terms of my moan about VFM. Scottish Widows got into a mess when parent Lloyds Banking Group fell out with Aberdeen. Frankly, since Scottish Widows sold SWIP there hasn’t been a strong hand on the investment tiller and fund reporting and governance are its weak spots.

On this, as on most matters, the IGC is precisely right and I’d like to thank them for a mercifully brief report that was good to read.

The proof of the pudding is in the eating. How Scottish Widows survives the pandemic is the test. So far so good – if the following section is good to go by.

Finally a word on Covid19

Scottish Widows is keeping its telephone helplines open to members. I made inquiries about this of IGC member Jackie Leiper and got the following response.

I have been updating the other IGC members twice a week on COVID-19, they have been to see the comms we’re using to support customers especially scheme members and as you say, we’ve worked extremely hard to maintain service over this period with our entire workplace team now working completely from home including telephony.

We had a fairly seamless switch over in Cheltenham having prepared well when disconnecting from the Zurich platform second half of last year, that disaster recovery planning has served us well.  The Edinburgh teams have had more challenges as less colleagues had laptops however we did have a home working pilot in flight that has been running so all of our systems had been adapted to home working so with some exceptional commitment from colleagues coming in to office to cover critical services until laptops appeared, I am delighted that we have been able to maintain a strong service with only a couple of lost days where we had to unexpectedly evacuate buildings


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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